Separating the Inventory Slack Routing Problem

Abstract

In practice, when faced with a complex optimization problem, human decision-makers often separate it into subproblems and then solve each subproblem instead of tackling the complete problem. This paper describes a study in which different approaches for separating the Inventory Slack Routing Problem (a complex vehicle routing problem) were simulated. A random search was used to simulate how a bounded rational human decision-maker would solve each subproblem. The results show that the structure of the separation and the objectives used in each subproblem can significantly affect the quality of the solutions that are generated. This suggests that organizations should consider and assess how they separate complex optimization problems so that their limited decision-making resources can be employed efficiently and effectively.