Article ID: | iaor20091284 |
Country: | Netherlands |
Volume: | 54 |
Issue: | 4 |
Start Page Number: | 1019 |
End Page Number: | 1047 |
Publication Date: | May 2008 |
Journal: | Computers & Industrial Engineering |
Authors: | Shah Nilay, Papageorgiou Lazaros G., Al-Ameri Tareq A. |
Keywords: | vehicle routing & scheduling, inventory |
This paper aims at designing a dynamic VMI system. In this system, the entire supply chain performance is optimized in terms of production planning at vendor's site, distribution strategy, and inventory management at manufacturer's site. We also explore some of the complications involved in setting up such a system. The VMI system is modeled as a mixed-integer linear program (MILP) using discrete-time representation. The mathematical representation follows the resource-task network (RTN) formulation. To address the complexity of the problem, different optimization-based solution algorithms are proposed and compared in terms of solution quality and CPU time.