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A new supply chain network design approach, regarding retailer's inventory level and supplier's response time

Author

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  • Reza Rashid
  • Saeed Dehnavi Arani
  • Seyed Farzad Hoseini
  • Mohammad Mohammadpour Omran

Abstract

This paper deals with the retailer's location problem, when inventory costs for retailers and response time costs for suppliers have been considered. Generally, in a supply chain, most of the parameters are not deterministic, for this reason, we considered demand and service time as stochastic parameters, and queuing theory has been used to prepare a comprehensive mathematical model. In this system, each supplier has been represented with an M/M/1 queue and each retailer has been represented with an M/M/1 queue with bulk arrival. Due to the computational complexity of the proposed model, a genetic algorithm has been proposed to obtain acceptable solutions in a reasonable time. Further, performance of the proposed (GA) is compared against LINGO package software for small-sized problems. Our computational results suggest that the proposed GA is able to solve our mathematical model, especially for large sizes. To evaluate performance of the model, a real example of dairy supply chains has been prepared, which confirmed efficiency of the model.

Suggested Citation

  • Reza Rashid & Saeed Dehnavi Arani & Seyed Farzad Hoseini & Mohammad Mohammadpour Omran, 2018. "A new supply chain network design approach, regarding retailer's inventory level and supplier's response time," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 31(4), pages 421-441.
    • Handle: RePEc:ids:ijores:v:31:y:2018:i:4:p:421-441
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