Abstract
In the retailer-supplier partnerships, the vendor-managed inventory (VMI) is one of the important policies in the supply chain management (SCM) to reduce the bullwhip effect. As there is a lack of study on the central warehouse via delivering cost in VMI literature, this paper presents a VMI model in SCM including single-vendor, multi-retailer, and single-warehouse. While the vendor confronts with two constraints, namely the number of orders and budget, the purpose of this research is to find order size, the shortest possible route, and replenishment frequencies for the vendor and the retailers to minimize the total inventory cost. As the proposed model is an NP-hard problem, a meta-heuristics namely particle swarm optimization (PSO) is employed to optimize the proposed model. Since there is no available benchmark for evaluation of the proposed method, a genetic algorithm is used to validate and verify the solution presented by PSO. Moreover, Taguchi method in the design of experiments calibrates the parameters of the algorithm to provide the reliable solution. Finally, the conclusion and further studies are presented.
Similar content being viewed by others
References
Bakeshlu EA, Sadeghi J, Poorbagheri T, Taghizadeh M (2014) Optimizing a bi-objective inventory model for a two-echelon supply chain management using a tuned meta-heuristic algorithm. Prod Manuf Res 2(1):156–166
Braglia M, Zavanella L (2003) Modelling an industrial strategy for inventory management in supply chains: the ‘consignment stock’ case. Int J Prod Res 41(16):3793–3808
Cárdenas-Barrón LE, Treviño-Garza G, Wee HM (2012) A simple and better algorithm to solve the vendor managed inventory control system of multi-product multi-constraint economic order quantity model. Expert Syst Appl 39(3):3888–3895
Clerc M (2006) Particle swarm optimization. ISTE Ltd, London
Darwish MA, Odah OM (2010) Vendor managed inventory model for single-vendor multi-retailer supply chains. Eur J Oper Res 204(3):473–484
Deep K, Das K (2013) A novel hybrid genetic algorithm for constrained optimization. Int J Syst Assur Eng Manag 4(1):86–93
Dong Y, Xu K (2002) A supply chain model of vendor managed inventory. Transp Res Part E: Logist Transp Rev 38(2):75–95
Duan Y, Luo J, Huo J (2010) Buyer-vendor inventory coordination with quantity discount incentive for fixed lifetime product. Int J Prod Econ 128(1):351–357
Elvander MS, Sarpola S, Mattsson S-A (2007) Framework for characterizing the design of VMI systems. Int J Phys Distrib Logist Manag 37(10):782–798
Gen M, Cheng R (2000) Genetic algorithms and engineering design. Wiley, New York
Goyal SK (1988) A joint economic-lot-size model for purchaser and vendor: a comment. Decis Sci 19(1):236–241
Goyal SK (1995) A one-vendor multi-buyer integrated inventory model: a comment. Eur J Oper Res 82(1):209–210
Gupta RK, Bhunia AK, Goyal SK (2009) An application of genetic algorithm in solving an inventory model with advance payment and interval valued inventory costs. Math Comput Model 49(5–6):893–905
Hariga M, Gumus M, Daghfous A, Goyal SK (2013) A vendor managed inventory model under contractual storage agreement. Comput Oper Res 40(8):2138–2144
Hill RM, Omar M (2006) Another look at the single-vendor single-buyer integrated production-inventory problem. Int J Prod Res 44(4):791–800
Hudnurkar M, Rathod U (2012) Collaborative supply chain: insights from simulation. Int J Syst Assur Eng Manag 3(2):122–144
Kennedy J, Eberhart R (1995) Particle swarm optimization. In: Proceedings of IEEE international conference on neural networks, Perth, WA, Australia
Kuo RJ, Han YS (2011) A hybrid of genetic algorithm and particle swarm optimization for solving bi-level linear programming problem––a case study on supply chain model. Appl Math Model 35(8):3905–3917
Lee J-Y, Cho RK (2014) Contracting for vendor-managed inventory with consignment stock and stockout-cost sharing. Int J Prod Econ 151:158–173
Maiti AK, Bhunia AK, Maiti M (2006) An application of real-coded genetic algorithm (RCGA) for mixed integer non-linear programming in two-storage multi-item inventory model with discount policy. Appl Math Comput 183(2):903–915
Marque`s G, Thierry C, Lamothe J, Gourc D (2010) A review of vendor managed inventory (VMI): from concept to processes. Prod Plan Control 21(6):547–561
Michaelraj LA, Shahabudeen P (2009) Replenishment policies for sustainable business development in a continuous credit based vendor managed inventory distribution system. Comput Ind Eng 56(1):260–266
Mousavi SM, Hajipour V, Niaki STA, Alikar N (2013) Optimizing multi-item multi-period inventory control system with discounted cash flow and inflation: two calibrated meta-heuristic algorithms. Appl Math Model 37(4):2241–2256
Mousavi SM, Sadeghi J, Niaki STA, Alikar N, Bahreininejad A, Metselaar HSC (2014) Two parameter-tuned meta-heuristics for a discounted inventory control problem in a fuzzy environment. Inf Sci 276:42–62
Nachiappan SP, Jawahar N (2007) A genetic algorithm for optimal operating parameters of VMI system in a two-echelon supply chain. Eur J Oper Res 182(3):1433–1452
Naderi B, Zandieh M, Roshanaei V (2009) Scheduling hybrid flowshops with sequence dependent setup times to minimize makespan and maximum tardiness. Int J Adv Manuf Technol 41(11):1186–1198
Pasandideh SHR, Niaki STA, Nia AR (2011) A genetic algorithm for vendor managed inventory control system of multi-product multi-constraint economic order quantity model. Expert Syst Appl 38(3):2708–2716
Pasandideh S, Niaki S, Hemmati Far M (2014) Optimization of vendor managed inventory of multiproduct EPQ model with multiple constraints using genetic algorithm. Int J Adv Manuf Technol 71(1–4):365–376
Pentico DW, Drake MJ (2011) A survey of deterministic models for the EOQ and EPQ with partial backordering. Eur J Oper Res 214(2):179–198
Roy R (1990) A primer on the Taguchi method. Society of Manufacturing Engineers, New York
Sadeghi J, Sadeghi A, Saidi-Mehrabad M (2011) A parameter-tuned genetic algorithm for vendor managed inventory model for a case single-vendor single-retailer with multi-product and multi-constraint. J Optim Ind Eng 4(9):57–67
Sadeghi J, Mousavi SM, Niaki STA, Sadeghi S (2013) Optimizing a multi-vendor multi-retailer vendor managed inventory problem: two tuned meta-heuristic algorithms. Knowl-Based Syst 50:159–170
Sadeghi J, Sadeghi S, Niaki STA (2014) A hybrid vendor managed inventory and redundancy allocation optimization problem in supply chain management: an NSGA-II with tuned parameters. Comput Oper Res 41:53–64
Sari K (2007) Exploring the benefits of vendor managed inventory. Int J Phys Distrib Logist Manag 37(7):529–545
Shi Y, Eberhart R (1998) Empirical study of particle swarm optimization. In: Proceedings of the IEEE congress on evolutionary computation, Washington, DC
Shi Y, Eberhart R (1998) A modified particle swarm optimizer. In: Proceedings of IEEE international conference on evolutionary computation, Anchorage, Alaska
Shi XH, Liang YC, Lee HP, Lu C, Wang QX (2007) Particle swarm optimization-based algorithms for TSP and generalized TSP. Inf Process Lett 103(5):169–176
Simchi-Levi D, Kaminsky P, Simchi-Levi E, Shankar R (2007) Designing and managing the supply chain: concepts, strategies and case studies. McGraw-Hill, New York
Sinha P, Chandwani A, Sinha T (2014) Algorithm of construction of optimum portfolio of stocks using genetic algorithm. Int J Syst Assur Eng Manag 1–19
Taguchi G, Chowdhury S, Wu Y (2005) Taguchi’s quality engineering handbook. Wiley, New Jersey
Tersine RJ (1993) Principles of inventory and materials management. Prentice Hall, New Jersey
Thangam A (2014) Retailer’s optimal replenishment policy in a two-echelon supply chain under two-part delay in payments and disruption in delivery. Int J Syst Assur Eng Manag 1–21
Yang W, Chan FTS, Kumar V (2012) Optimizing replenishment polices using genetic algorithm for single-warehouse multi-retailer system. Expert Syst Appl 39(3):3081–3086
Yao Y, Evers PT, Dresner ME (2007) Supply chain integration in vendor-managed inventory. Decis Support Syst 43(2):663–674
Yokota T, Gen M, Li Y-X (1996) Genetic algorithm for non-linear mixed integer programming problems and its applications. Comput Ind Eng 30(4):905–917
Yu X, Gen M (2010) Introduction to evolutionary algorithms. Springer, London
Yu Y, Wang Z, Liang L (2012) A vendor managed inventory supply chain with deteriorating raw materials and products. Int J Prod Econ 136(2):266–274
Zavanella L, Zanoni S (2009) A one-vendor multi-buyer integrated production-inventory model: the consignment stock case. Int J Prod Econ 118(1):225–232
Acknowledgments
The authors are thankful for constructive comments of anonymous reviewers that significantly improved the presentation of the paper.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Sadeghi, J., Taghizadeh, M., Sadeghi, A. et al. Optimizing a vendor managed inventory (VMI) model considering delivering cost in a three-echelon supply chain using two tuned-parameter meta-heuristics. Int J Syst Assur Eng Manag 6, 500–510 (2015). https://doi.org/10.1007/s13198-014-0308-4
Received:
Revised:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s13198-014-0308-4