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Simulation-based evolution of resupply and routing policies in rich vendor-managed inventory scenarios

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  • Stefan Vonolfen
  • Michael Affenzeller
  • Andreas Beham
  • Efrem Lengauer
  • Stefan Wagner

Abstract

Vendor managed inventory combines inventory management and transportation. Compared to classical inventory management approaches, this strategy offers various degrees of freedom for the vendor while providing a certain service quality level for the customers. To capture the characteristics of rich real-world scenarios, our problem formulation consists of multiple customers, many products and stochastic product usages. Additionally, we also consider mixed formulations, where only a certain part of the customers is switched to a vendor managed inventory to allow a stepwise transition. We show that resupply and routing policies can be evolved autonomously for those scenarios using a simulation-based optimization approach. By combining inventory management and routing, the resulting policies aim to minimize costs and to maximize resource usage while maintaining a given service level. In order to validate our approach, we perform case studies and apply the evolved rules on a large-scale vendor managed inventory scenario for supermarkets. Furthermore, we show that our methodology can be used to perform a sensitivity analysis by considering the influence of exogenous and endogenous factors on the decision process, if a customer base should be transitioned to a vendor managed inventory. Copyright Springer-Verlag 2013

Suggested Citation

  • Stefan Vonolfen & Michael Affenzeller & Andreas Beham & Efrem Lengauer & Stefan Wagner, 2013. "Simulation-based evolution of resupply and routing policies in rich vendor-managed inventory scenarios," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 21(2), pages 379-400, March.
  • Handle: RePEc:spr:cejnor:v:21:y:2013:i:2:p:379-400
    DOI: 10.1007/s10100-011-0232-5
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    References listed on IDEAS

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    Cited by:

    1. Stefan Vonolfen & Michael Affenzeller, 2016. "Distribution of waiting time for dynamic pickup and delivery problems," Annals of Operations Research, Springer, vol. 236(2), pages 359-382, January.
    2. Stefan Vonolfen & Michael Affenzeller, 2016. "Distribution of waiting time for dynamic pickup and delivery problems," Annals of Operations Research, Springer, vol. 236(2), pages 359-382, January.

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