Multi-objective production-distribution planning based on vendor-managed inventory strategy in a supply chain
Abstract
Purpose
The production-distribution (P-D) problems are two critical problems in many industries, in particular, in manufacturing systems and the supply chain management. In previous researches on P-D planning, the demands of the retailers and their inventory levels have less been controlled. This may lead into huge challenges for a P-D plan such as the bullwhip effects. Therefore, to remove this challenge, the purpose of this paper is to integrate a P-D planning and the vendor-managed inventory (VMI) as a strong strategy to manage the bullwhip effects in supply chains. The proposed P-D-VMI aims to minimize the total cost of the manufacturer, the total cost of the retailers, and the total distribution time simultaneously.
Design/methodology/approach
This paper presents a multi-objective non-linear model for a P-D planning in a three-level supply chain including several external suppliers at the first level, a single manufacturer at the second level, and multi-retailer at the third level. A non-dominated sorting genetic algorithm and a non-dominated ranking genetic algorithm are designed and tuned to solve the proposed problem. Then, their performances are statistically analyzed and ranked by the TOPSIS method.
Findings
The applicability of the proposed model and solution methodologies are demonstrated under several problems. A sensitivity analysis indicates the market scale and demand elasticity have a substantial impact on the total cost of the manufacturer in the proposed P-D-VMI.
Originality/value
Although the P-D planning is a popular approach, there has been little discussion about the P-D planning based on VMI so far. The novelty comes from developing a practical and new approach that integrates the P-D planning and VMI.
Keywords
Acknowledgements
The authors would like to acknowledge the efforts and the consideration of the editor and all of the anonymous reviewers for their valuable comments and suggestions to improve the quality of the paper.
Citation
Niknamfar, A.H. (2015), "Multi-objective production-distribution planning based on vendor-managed inventory strategy in a supply chain", Industrial Management & Data Systems, Vol. 115 No. 6, pp. 1086-1112. https://doi.org/10.1108/IMDS-03-2015-0073
Publisher
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited