Min-Max exact and heuristic policies for a two-echelon supply chain with inventory and transportation procurement decisions

We study the problem in which one supplier delivers a product to a set of retailers overtime by using an outsourced fleet of vehicles. Since the probability distribution of thedemand is not known, we provide a Min–Max approach to find robust policies. We showthat the optimal Min-Expected Value policy can be very poor in the worst case. We providea Min–Max Dynamic Programming formulation that allows us to exactly solve the problemin small instances. Finally, we implement a Min–Max Matheuristic to solve benchmarkinstances and show that it is very effective.