A mathematical inventory model for a single-vendor multi-retailer supply chain based on the Vendor Management Inventory Policy
Ehsan Najafnejhad (a.najafnejhad@gmail.com),
Mahdieh Tavassoli Roodsari (st_m.tavassoli@azad.ac.ir),
Somayeh Sepahrom and
Mojtaba Jenabzadeh
Additional contact information
Ehsan Najafnejhad: Islamic Azad University
Mahdieh Tavassoli Roodsari: South Tehran Branch, Islamic Azad University
Somayeh Sepahrom: Islamic Azad University
Mojtaba Jenabzadeh: Islamic Azad University
International Journal of System Assurance Engineering and Management, 2021, vol. 12, issue 3, No 19, 579-586
Abstract:
Abstract In supply chain management, the vendor managed inventory plays a vital role in production systems to decrease the total costs by reducing the bullwhip effect. The vendor managed inventory (VMI) policy reduces the decision-making levels by which prediction error of demand is reduced. This policy significantly reduces demand variations in inventory management. This paper develops an inventory model based on the vendor-managed policy in which there are single-vendor and multiple retailers. In addition to inventory decisions, the proposed model optimizes an upper limit for inventory levels based on a penalty. To close real-world conditions, we consider integer values for order quantities per cycle for retailers. Moreover, the number of vendor’s orders has an upper limit. The purpose of the developed mathematical model is to find an optimal value for replenishment frequencies of retailers, order quantities, and upper limits on the inventory level of retailers. Since the proposed model is an integer non-linear programming problem (INLP), we employ a metaheuristic optimization approach called the imperialist competitive algorithm. To verify the proposed methodology and algorithm, we compare the obtained solutions with an exact method. In different scenarios, the mathematical model is solved, and the results showed that vendors follow the normal situation in which there is no overstock penalty in such a way that vendors experience backorder inventory problems. The main contribution of this paper was to include the upper limits on the inventory levels in VMI mathematical models along with a verified meta-heuristic algorithm.
Keywords: Vendor managed inventory; Imperialist competitive algorithm; Supply chain management; Metaheuristic optimization (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (3)
Downloads: (external link)
http://link.springer.com/10.1007/s13198-021-01120-z Abstract (text/html)
Access to the full text of the articles in this series is restricted.
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:spr:ijsaem:v:12:y:2021:i:3:d:10.1007_s13198-021-01120-z
Ordering information: This journal article can be ordered from
http://www.springer.com/engineering/journal/13198
DOI: 10.1007/s13198-021-01120-z
Access Statistics for this article
International Journal of System Assurance Engineering and Management is currently edited by P.K. Kapur, A.K. Verma and U. Kumar
More articles in International Journal of System Assurance Engineering and Management from Springer, The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden
Bibliographic data for series maintained by Sonal Shukla (sonal.shukla@springer.com) and Springer Nature Abstracting and Indexing (indexing@springernature.com).