A geometric programming approach for a vendor managed inventory of a multiretailer multi-item EPQ model

2020 ◽  
Vol 54 (5) ◽  
pp. 1401-1418
Author(s):  
Yasaman Karimian ◽  
Abolfazl Mirzazadeh ◽  
Seyed Hamidreza Pasandideh ◽  
Mohammad Namakshenas
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Geometric Programming ◽  
Optimal Solution ◽  
Programming Approach ◽  
Stochastic Environment ◽  
Vendor Managed Inventory ◽  
Economic Production ◽  
Epq Model ◽  
Total Inventory

Due to the uncertain situations of the world, considering inventory management in a stochastic environment gains a lot of interest. In this paper, we propose a multi-item economic production quantity (EPQ) model with a shortage for a single-vendor, multi-retailer supply chain under vendor managed inventory (VMI) policy in a stochastic environment. Three stochastic constraints are developed in the model. Geometric programming (GP) approach is employed to find the optimal solution of the nonlinear stochastic programming problem to minimize the mean-variance of the total inventory cost of the system. Since the problem is in the Signomial form, first, an algorithm is used to convert the model into the standard GP form. The performance of the addressed model and the solving method are evaluated based on computational experiments and sensitivity analysis. A case study in an Iranian furniture supply chain is conducted to show the applicability of the proposed model and 17.78% improvement in terms of total cost is gained.

scholarly journals The effect of service constraint on EPQ model with random defective rate

2006 ◽  
Vol 2006 ◽  
pp. 1-5 ◽  
Author(s):  
Yung-Fu Huang
Keyword(s):  
Annual Cost ◽  
Differential Calculus ◽  
Cost Minimization ◽  
Algebraic Approach ◽  
Optimal Solution ◽  
Service Level ◽  
Economic Production Quantity ◽  
Economic Production ◽  
Epq Model ◽  
Production Quantity

Chiu studied the effect of service-level constraint on the economic production quantity (EPQ) model with random defective rate. In this note, we will offer a simple algebraic approach to replace his differential calculus skill to find the optimal solution under the expected annual cost minimization.

scholarly journals EPQ Model for Trended Demand with Rework and Random Preventive Machine Time

2013 ◽  
Vol 2013 ◽  
pp. 1-8 ◽  
Author(s):  
Nita H. Shah ◽  
Dushyantkumar G. Patel ◽  
Digeshkumar B. Shah
Keyword(s):  
Sensitivity Analysis ◽  
Optimal Solution ◽  
Rate Of Change ◽  
Machine Time ◽  
Economic Production Quantity ◽  
Economic Production ◽  
Model Search ◽  
Demand Rate ◽  
Epq Model ◽  
Production Quantity

Economic production quantity (EPQ) inventory model for trended demand has been analyzed with rework facility and stochastic preventive machine time. Due to the complexity of the model, search method is proposed to determine the best optimal solution. A numerical example and sensitivity analysis are carried out to validate the proposed model. From the sensitivity analysis, it is observed that the rate of change of demand has significant impact on the optimal inventory cost. The model is very sensitive to the production and demand rate.

Inventory Control and Replenishment of Multi-Product Multi-Echelon Based on Time Cost Under JMI Environment

2013 ◽  
Vol 5 (2) ◽  
pp. 19-30
Author(s):  
Zhi Chen ◽  
Chao Ren ◽  
Ren-long Zhang ◽  
Mi-Yuan Shan
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Service Level ◽  
Control Model ◽  
Management Tool ◽  
Time Cost ◽  
Inventory Cost ◽  
Inventory Costs ◽  
Total Inventory ◽  
Replenishment Strategy

Joint managed inventory is an advanced supply chain inventory management tool, which will effectively tackle the complicated problem between the inventory cost of supply chain and service level. The research on inventory model and its’ control under JMI environment is a hot issue at present. In this paper, the authors deeply discuss the question of the inventory time costs about the multi-product and multi-echelon control model and its’ replenishment strategy under JMI environment. With considering the foundation of JMI and time cost, the authors propose the multi-product multi-echelon inventory cost control model under time cost. Then formulate corresponding replenishment strategy. At last, through a numerical example, the authors discover that the multi-product multi-echelon joint inventory management based on time cost can effectively reduce the total inventory costs and improve the competitiveness of the entire supply chain.

A Mechanism Design Approach to Vendor Managed Inventory

2020 ◽  
Vol 66 (6) ◽  
pp. 2628-2652 ◽  
Author(s):  
Bharadwaj Kadiyala ◽  
Özalp Özer ◽  
Alain Bensoussan
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Operations Management ◽  
Inventory Level ◽  
Local Market ◽  
Management Problem ◽  
Vendor Managed Inventory ◽  
Market Conditions ◽  
Market Signals ◽  
Pos Data

This paper studies an inventory management problem faced by an upstream supplier that is in a collaborative agreement, such as vendor-managed inventory (VMI), with a retailer. A VMI partnership provides the supplier an opportunity to manage inventory for the supply chain in exchange for point-of-sales (POS)- and inventory-level information from the retailer. However, retailers typically possess superior local market information and as has been the case in recent years, are able to capture and analyze customer purchasing behavior beyond the traditional POS data. Such analyses provide the retailer access to market signals that are otherwise hard to capture using POS information. We show and quantify the implication of the financial obligations of each party in VMI that renders communication of such important market signals as noncredible. To help institute a sound VMI collaboration, we propose learn and screen—a dynamic inventory mechanism—for the supplier to effectively manage inventory and information in the supply chain. The proposed mechanism combines the ability of the supplier to learn about market conditions from POS data (over multiple selling periods) and dynamically determine when to screen the retailer and acquire his private demand information. Inventory decisions in the proposed mechanism serve a strategic purpose in addition to their classic role of satisfying customer demand. We show that our proposed dynamic mechanism significantly improves the supplier’s expected profit and increases the efficiency of the overall supply chain operations under a VMI agreement. In addition, we determine the market conditions in which a strategic approach to VMI results in significant profit improvements for both firms, particularly when the retailer has high market power (i.e., when the supplier highly depends on the retailer) and when the supplier has relatively less knowledge about the end customer/market compared with the retailer. This paper was accepted by Gad Allon, operations management.

The Study on the Model of Vendor Management Inventory in Supply Chain

2014 ◽  
Vol 644-650 ◽  
pp. 6105-6108
Author(s):  
Li Li Dong
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Optimal Solution ◽  
Management Theory ◽  
Inventory Problem ◽  
Inventory Cost ◽  
Chain Management ◽  
Management Level ◽  
Vendor Management Inventory ◽  
Vendor Management

In order to reduce inventory cost effectively, the vendor management inventory (VMI) is studied in this paper. The inventory problem of supply chain is described, the model of VMI is established, and the optimal solution is obtained. The research in this paper can enrich the supply chain management theory, and help enterprises improve inventory management level.

scholarly journals A State of art on economic production quantity models

2017 ◽  
Vol 14 (2) ◽  
pp. 183 ◽  
Author(s):  
Atul B. Borade ◽  
Pankaj S. Ardak
Keyword(s):  
Inventory Management ◽  
Wide Spectrum ◽  
Future Research ◽  
Setup Cost ◽  
Economic Production Quantity ◽  
Economic Production ◽  
Research Problems ◽  
Epq Model ◽  
Production Quantity ◽  
State Of Art

Economic ordering quantity is a commonly accepted inventory management model. Its variant economic production quantity (EPQ) model is also a widely researched inventory model. The number of researchers had developed the EPQ model by considering different parameters, such as shortage, backorder, setup cost, deterioration, constant or linear or power form of the demand, rework, scrap, inspection, machine breakdown, etc. The objective of this paper is to review the literature, identify the gap in literature, develop and expand the knowledge base regarding EPQ models. This state of art paper would act as a guideline for researchers. The wide spectrum of the subject provides interesting future research problems.

scholarly journals Pengembangan Model Vendor Managed Inventory dengan Banyak Retailer yang Mempertimbangkan Ketidakpastian Lead Times

2018 ◽  
Vol 7 (1) ◽  
pp. 41
Author(s):  
Carles Sitompul ◽  
Paulina Ariningsih ◽  
Ida Bagus Deva Narswara Santosa
Keyword(s):  
Inventory Management ◽  
Lead Time ◽  
Mathematical Formulation ◽  
Lead Times ◽  
Approximation Model ◽  
Vendor Managed Inventory ◽  
Inventory Cost ◽  
Inventory Management System ◽  
Total Inventory ◽  
The Cost

<p><em>An inventory management system in supply chains called Vendor Managed Inventory (VMI) is very promising due to the cost efficiency resulted from implementing such system. This research aims to develop a vendor managed inventory for multiple retailers. The model also takes into account lead time uncertainties from vendor to its retailers. A mathematical formulation for VMI with multiple retailers is first developed using deterministic lead times.  Subsequently, lead times uncertainties are then taken into account where modes lead times are broken into two components: modes and delays, each with their respective probabilities. In turn, an approximation model is used to solve the problem because the complexity aroused from the model is difficult to solve using analytical methods. It is shown that the proposed approximation method is able to solve VMI problem with multiple retailers and uncertain lead times.  Furthermore, the total inventory cost is significantly reduced when compared to the usual economic order quantity method because stockouts are less frequent. </em></p>

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