| Article ID: | iaor20091060 |
| Country: | South Korea |
| Volume: | 34 |
| Issue: | 3 |
| Start Page Number: | 362 |
| End Page Number: | 372 |
| Publication Date: | Sep 2008 |
| Journal: | Journal of the Korean Institute of Industrial Engineers |
| Authors: | Park Yang-Byung, Park Hae-Soo |
| Keywords: | heuristics: genetic algorithms, inventory, programming: integer |
Manufacturers, or vendors, and their customers continue to adopt vendor–managed inventory (VMI) program to improve supply chain performance through collaboration achieved by consolidating replenishment responsibility upstream with vendors. In this paper, we construct a mixed integer linear programming model and propose a genetic algorithm for the integrated inventory and routing problems with lost sales maximizing the total profit in the VMI supply chains which comprise a single manufacturer and multi-retailer. The proposed GA is compared with the mathematical model on the various sized test problems with respect to the solution quality and computation time. As a result, the GA demonstrates the capability of reaching solutions that are very close to those obtained by the mathematical model for small problems and stay within 3.2% from those obtained by the mathematical model for larger problems, with a much shorter computation time. Finally, we investigate the effects of the cost and operation variables on the total profit of the problem as well as the GA performance through the sensitivity analyses.