Study on integrated optimization model of inventory and routing problem and its application in China's online agricultural products logistics.

China's online shopping market developed rapidly in the last ten years. More and more companies focus on the performance of the supply chain instead of their own performance. Relatively short agricultural products shelf life leads to low profit. According to the characteristics of the online agricultural products logistics, the way how to control inventory cost and transportation cost in order to increase profits has become a serious and urgently solved problem. In order to solve the shortage of the practical application of the VMI mode under online shopping environment, the paper makes the combination of the VMI and 3PL. Firstly, the inventory routing model of a three-level distribution system with a vendor, a third party logistics company and multiple geographically dispersed retailers based on VMI-3PL and fixed partition policies is built. The goal is to minimize the total cost including the transportation cost and the inventory cost with no allowing storage. Secondly, the paper proposed a heuristic algorithm which is based on Matlab7.5 and ant colony algorithm. Lastly, Computational results show the performance of the solution approach.