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Hybrid algorithm for a vendor managed inventory system in a two-echelon supply chain

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  • Diabat, Ali

Abstract

In this paper we address the issue of vendor managed inventory (VMI) by considering a two-echelon single vendor/multiple buyer supply chain network. We try to find the optimal sales quantity by maximizing profit, given as a nonlinear and non-convex objective function. For such complicated combinatorial optimization problems, exact algorithms and optimization commercial software such as LINGO are inefficient, especially on practical-size problems. In this paper we develop a hybrid genetic/simulated annealing algorithm to deal with this nonlinear problem. Our results demonstrate that the proposed hybrid algorithm outperforms previous methodologies and achieves more robust solutions.

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  • Diabat, Ali, 2014. "Hybrid algorithm for a vendor managed inventory system in a two-echelon supply chain," European Journal of Operational Research, Elsevier, vol. 238(1), pages 114-121.
    • Handle: RePEc:eee:ejores:v:238:y:2014:i:1:p:114-121
    DOI: 10.1016/j.ejor.2014.02.061
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    References listed on IDEAS

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    1. Zhao, Qiu-Hong & Chen, Shuang & Zang, Cun-Xun, 2008. "Model and algorithm for inventory/routing decision in a three-echelon logistics system," European Journal of Operational Research, Elsevier, vol. 191(3), pages 623-635, December.
    2. Sila Çetinkaya & Chung-Yee Lee, 2000. "Stock Replenishment and Shipment Scheduling for Vendor-Managed Inventory Systems," Management Science, INFORMS, vol. 46(2), pages 217-232, February.
    3. Zhang, Tinglong & Liang, Liang & Yu, Yugang & Yu, Yan, 2007. "An integrated vendor-managed inventory model for a two-echelon system with order cost reduction," International Journal of Production Economics, Elsevier, vol. 109(1-2), pages 241-253, September.
    4. Ali Diabat & Jean-Philippe Richard & Craig Codrington, 2013. "A Lagrangian relaxation approach to simultaneous strategic and tactical planning in supply chain design," Annals of Operations Research, Springer, vol. 203(1), pages 55-80, March.
    5. Dong, Yan & Xu, Kefeng, 2002. "A supply chain model of vendor managed inventory," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 38(2), pages 75-95, April.
    6. Darwish, M.A. & Odah, O.M., 2010. "Vendor managed inventory model for single-vendor multi-retailer supply chains," European Journal of Operational Research, Elsevier, vol. 204(3), pages 473-484, August.
    7. Claudia Archetti & Luca Bertazzi & Gilbert Laporte & Maria Grazia Speranza, 2007. "A Branch-and-Cut Algorithm for a Vendor-Managed Inventory-Routing Problem," Transportation Science, INFORMS, vol. 41(3), pages 382-391, August.
    8. Nachiappan, S.P. & Jawahar, N., 2007. "A genetic algorithm for optimal operating parameters of VMI system in a two-echelon supply chain," European Journal of Operational Research, Elsevier, vol. 182(3), pages 1433-1452, November.
    9. Zhao, Qiu-Hong & Wang, Shou-Yang & Lai, K.K., 2007. "A partition approach to the inventory/routing problem," European Journal of Operational Research, Elsevier, vol. 177(2), pages 786-802, March.
    10. Shah, Janat & Goh, Mark, 2006. "Setting operating policies for supply hubs," International Journal of Production Economics, Elsevier, vol. 100(2), pages 239-252, April.
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    Citations

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    Cited by:

    1. Devika Kannan & Kiran Garg & P. C. Jha & Ali Diabat, 2017. "Integrating disassembly line balancing in the planning of a reverse logistics network from the perspective of a third party provider," Annals of Operations Research, Springer, vol. 253(1), pages 353-376, June.
    2. Ali Diabat & Tarek Abdallah & Tung Le, 2016. "A hybrid tabu search based heuristic for the periodic distribution inventory problem with perishable goods," Annals of Operations Research, Springer, vol. 242(2), pages 373-398, July.
    3. Tarhini, Hussein & Karam, Mario & Jaber, Mohamad Y., 2020. "An integrated single-vendor multi-buyer production inventory model with transshipments between buyers," International Journal of Production Economics, Elsevier, vol. 225(C).
    4. Wu, Kan & Yuan, Xue-Ming, 2016. "Optimal production-inventory policy for an integrated multi-stage supply chain with time-varying demandAuthor-Name: Zhao, Shi Tao," European Journal of Operational Research, Elsevier, vol. 255(2), pages 364-379.
    5. Xianpei Hong & Wang Chunyuan & Lei Xu & Ali Diabat, 2016. "Multiple-vendor, multiple-retailer based vendor-managed inventory," Annals of Operations Research, Springer, vol. 238(1), pages 277-297, March.
    6. Anderson Rogério Faia Pinto & Marcelo Seido Nagano, 2020. "Genetic algorithms applied to integration and optimization of billing and picking processes," Journal of Intelligent Manufacturing, Springer, vol. 31(3), pages 641-659, March.
    7. Zhang, Peng & Xu, Xiaofeng & Shi, Victor & Zhu, Jing, 2020. "Simultaneous inventory competition and transshipment between retailers," International Journal of Production Economics, Elsevier, vol. 230(C).
    8. Ata Allah Taleizadeh, 2017. "Stochastic Multi-Objectives Supply Chain Optimization with Forecasting Partial Backordering Rate: A Novel Hybrid Method of Meta Goal Programming and Evolutionary Algorithms," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 34(04), pages 1-28, August.
    9. Nelly Oelze, 2017. "Sustainable Supply Chain Management Implementation–Enablers and Barriers in the Textile Industry," Sustainability, MDPI, vol. 9(8), pages 1-15, August.
    10. V. Anjana & R. Sridharan & P. N. Ram Kumar, 2020. "Metaheuristics for solving a multi-objective flow shop scheduling problem with sequence-dependent setup times," Journal of Scheduling, Springer, vol. 23(1), pages 49-69, February.
    11. Sadeghi, Javad & Mousavi, Seyed Mohsen & Niaki, Seyed Taghi Akhavan & Sadeghi, Saeid, 2014. "Optimizing a bi-objective inventory model of a three-echelon supply chain using a tuned hybrid bat algorithm," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 274-292.
    12. Xianpei Hong & Wang Chunyuan & Lei Xu & Ali Diabat, 2016. "Multiple-vendor, multiple-retailer based vendor-managed inventory," Annals of Operations Research, Springer, vol. 238(1), pages 277-297, March.
    13. Roozbeh Nia, Ali & Awasthi, Anjali & Bhuiyan, Nadia, 2023. "Integrate exergy costs and carbon reduction policy in order to optimize the sustainability development of coal supply chains in uncertain conditions," International Journal of Production Economics, Elsevier, vol. 257(C).

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