Abstract:
In this study, a vendor-managed inventory model is developed for a single-vendor multiple-retailer single-warehouse (SV-MR-SV) supply chain problem based on the economic order quantity in which demands are stochastic and follow a uniform probability distribution. In order to reduce holding costs and to help balanced on-hand inventory cost between the vendor and the retailers, it is assumed that all inventory is held at a central warehouse with the lowest cost among the parties. The capacity of the central warehouse is limited. The objective is to find the warehouse replenishment frequency, the vendor's replenishment frequency, the order points, and the order quantities of the retailers such that the total inventory cost of the integrated supply chain is minimized. The proposed model is a mixed integer nonlinear programming problem (MINLP); hence, a genetic algorithm (GA) is utilized to solve this NP-hard problem. The parameters of the GA are calibrated using the Taguchi method to find better solutions. Some numerical illustrations are solved at the end to demonstrate the applicability of the proposed methodology and to evaluate the performance of the solution method.
Machine summary:
"The objective is to find the warehouse replenishment frequency, the vendor's replenishment frequency, the order points, and the order quantities of the retailers such that the total inventory cost of the integrated supply chain is minimized.
Keywords: Supply chain management; Vendor managed inventory; Probabilistic demand; Central warehouse; Genetic algorithm; Taguchi method.
(2007) presented a single-vendor multi-retailer supply chain model under the VMI contract, in which the demand rate was assumed constant and the buyer`s ordering cycles were different.
(2011) developed a multi-objective model for a location–inventory problem (MOLIP) under the VMI policy in a single-vendor multi-retailer supply chain and investigated the possibility of using a multi-objective version of the non-dominated sorting genetic algorithm (NSGA-II) to solve it.
Disney & Towill (2002) studied a supply chain under VMI, where vendor satisfies the retailer`s orders and controls retailer`s inventory by defining the order quantity and order time of the retailer.
(2007) proposed an analytical model for a single vendor-single retailer supply chain based on EOQ and showed VMI would reduce the total cost.
For instance, Nachiappan & Jawahar (2007) employed a GA to find a near-optimum solution of a single-vendor multiple buyers supply chain problem under the VMI policy.
6. Conclusion and future research In this paper, an integrated stochastic inventory model in a one-vendor multi-retailer single-warehouse three-echelon supply chain was developed with respect to the vendor managed inventory policy.
Evolutionary algorithms for optimal operating parameters of vendor managed inventory systems in a two echelon supply chain."