Multi-objective optimisation for pricing and distribution in a supply chain with stochastic demands

M. Karimi-Nasab, D. Shishebori and S.G.R. Jalali-Naini

International Journal of Industrial and Systems Engineering, 2013, vol. 13, issue 1, 56-72

Abstract: In this research, a new multi-objective approach is proposed to determine the distribution policy for a wholesaler. The wholesaler distributes supplementary nutrition to a set of local distribution centres positioned around the wholesaler, geographically. Each local distribution centre has its own stochastic demand over planning periods. Also, for each local distribution centre, the demand has a normal distribution with estimated mean and variance for a planning period. The model illustrates the conflict of two partners' objectives: manager of the wholesaler aims to maximising the total profit of the wholesaler, and local distribution centres desire to maximise the minimum service level received from the wholesaler. The approach optimises selling price, carrying cost, batch size and services level of multi-items for each local distribution centre in every planning period. As the demands are stochastic input data, there exist different Pareto frontiers with corresponding probabilities that among them, we propose to find the frontier corresponding to expected demand volumes. This Pareto frontier is the most stable among other ones. Finally, the computational results in a real case data are analysed.

Keywords: multi-items; multi-period; wholesalers; distribution policy; multi-objective optimisation; pricing; supply chain management; SCM; distribution centres; selling price; carrying cost; batch size; service levels; stochastic demand. (search for similar items in EconPapers)
Date: 2013
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