Inventory model in a four-echelon integrated supply chain: modeling and optimization

2017 ◽  
Vol 12 (4) ◽  
pp. 739-762 ◽  
Author(s):  
Abolfazl Gharaei ◽  
Seyed Hamid Reza Pasandideh ◽  
Alireza Arshadi Khamseh
Keyword(s):  
Supply Chain ◽  
Nonlinear Model ◽  
Interior Point ◽  
Inventory Model ◽  
Inventory Cost ◽  
Content Type ◽  
Multi Stage ◽  
Total Inventory ◽  
Integrated Supply Chain ◽  
Stochastic Constraints

Purpose The main purpose is to minimize the total inventory cost of chain, whereas the stochastic constraints are satisfied. In other words, the goal is to find optimum agreed stockpiles and period length for products to minimize the total inventory cost of the chain while the stochastic constraints are fulfilled. Design/methodology/approach This paper designs and optimizes an integrated inventory model in a four-echelon supply chain that contains a supplier, a producer, a wholesaler and multiple retailers. All four levels agree with each other to make an integrated inventory system. Products in this model have a multi-stage production process, and the model is bounded by multiple stochastic constraints. The problem model is nonlinear and large. So, the interior point method as an effective algorithm is used for solving the recent convex nonlinear model. Two numerical examples are solved to demonstrate the application of this methodology and to evaluate the performance of the proposed approach. Findings The findings showed the model is applicable for real-world supply chain problems in the cases that echelons are going to do executive external integration. Also, the Interior Point algorithm has a satisfactory performance and a high efficiency in terms of optimum solution for solving nonlinear and large models. Originality/value The authors designed and optimized the inventory cost in a four-level integrated supply chain in stochastic conditions. The new decision variables, number of chain levels, multi-products, stochastic constraints and multi-stage products in four-level integrated supply chain are other novelties of this paper. The authors provided an efficient algorithm for solving a large-scale and nonlinear model in this research, too.

Comparative multi criteria analysis and dependent optimisation through integrated supply chain

2014 ◽  
Vol 63 (8) ◽  
pp. 1046-1069 ◽  
Author(s):  
Sanjay Sharma ◽  
Akshat Sisodia
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Service Level ◽  
Inventory Level ◽  
Inventory Policies ◽  
Inventory Cost ◽  
Content Type ◽  
Customer Service Level ◽  
Integrated Supply Chain ◽  
Different Levels

Purpose – The purpose of this paper is to compare various inventory policies and their effect on various performance metrics at different levels of a multi stage supply chain. Later the model is integrated to include optimization of entire supply chain through implementation of collaborative supply chain model. Design/methodology/approach – Alternative inventory policies have been developed at different echelons and a comparison reflecting the usability on various factors such as inventory level, inventory cost and service level is presented so as to support the decision-making process. Various inventory policies such as economic order quantity, periodic ordering (T, M) and stock to demand have been considered. Along with the basic assumptions; lead time, demand variability, variability in demand during lead time, stock out costs have also been included to make the model more applicable to practical situations. Findings – After the selection of most appropriate inventory policy at each level through a decision matrix, the total cost of operating such a supply chain is calculated along with other parameters such as service level and inventory turns. The approach is of aggregating the optimized value at each echelon referred to as aggregated supply chain in the paper. Then the concept of integrated supply chain is introduced which optimizes the supply chain as a whole, rather than aggregating local optima. The comparison is made between the two approaches that prove the integrated supply chain's superiority. Furthermore, dependent optimization is run as it is not practically possible for each echelon to optimize at the same time. Originality/value – Each echelon is allowed to optimize at a time and other echelons assume corresponding values. This final comparative multi criterion analysis is based on the three factors, i.e. inventory cost, customer service level and inventory turnover with different weights assigned to each factor at different levels of a supply chain. Finally a consolidation of results is made to reflect the overall preference which proves that an integrated supply chain best serves all the parameters combined together.

Two-Echelon Inventory Stochastic Model of Supply Chain Based on Service Level Constraints

2014 ◽  
Vol 971-973 ◽  
pp. 2448-2451
Author(s):  
Da Li Jiang ◽  
Guang Fu Zhu ◽  
De Li
Keyword(s):  
Supply Chain ◽  
Stochastic Model ◽  
Service Level ◽  
Inventory Model ◽  
Inventory Level ◽  
Effective Algorithm ◽  
Inventory Cost ◽  
Total Inventory

The study on multi-echelon inventory of supply chain is becoming more and more important in E-business era. This paper proposes a two-echelon inventory model with one supplier and several retailers, in which a certain service level has to be satisfied and the goal is to minimize the total inventory cost. In addtion it puts forward an effective algorithm for this model to obtain the optimal replenishment period and inventory level of each supply chain node.

scholarly journals Inventory model for deteriorating items with negative exponential demand, probabilistic deterioration and fuzzy lead time under partial back logging

2020 ◽  
Vol 30 (3) ◽  
Author(s):  
Nabendu Sen ◽  
Sumit Saha
Keyword(s):  
Inventory Management ◽  
Lead Time ◽  
Probability Distributions ◽  
Optimal Strategies ◽  
Inventory Model ◽  
Deteriorating Items ◽  
Optimal Time ◽  
Inventory Cost ◽  
Total Inventory ◽  
Negative Exponential

The effect of lead time plays an important role in inventory management. It is also important to study the optimal strategies when the lead time is not precisely known to the decision makers. The aim of this paper is to examine the inventory model for deteriorating items with fuzzy lead time, negative exponential demand, and partially backlogged shortages. This model is unique in its nature due to probabilistic deterioration along with fuzzy lead time. The fuzzy lead time is assumed to be triangular, parabolic, trapezoidal numbers and the graded mean integration representation method is used for the defuzzification purpose. Moreover, three different types of probability distributions, namely uniform, triangular and Beta are used for rate of deterioration to find optimal time and associated total inventory cost. The developed model is validated numerically and values of optimal time and total inventory cost are given in tabular form, corresponding to different probability distribution and fuzzy lead-time. The sensitivity analysis is performed on variation of key parameters to observe its effect on the developed model. Graphical representations are also given in support of derived optimal inventory cost vs. time.

Moving towards “Slow Food”, the new frontier of culinary innovation in India

2016 ◽  
Vol 8 (4) ◽  
pp. 444-460 ◽  
Author(s):  
Sandeep Munjal ◽  
Sanjay Sharma ◽  
Pallavi Menon
Keyword(s):  
Supply Chain ◽  
Value Chain ◽  
Positive Impact ◽  
Round Table Discussion ◽  
Bottom Line ◽  
Slow Food ◽  
Content Type ◽  
Hospitality Sector ◽  
Integrated Supply Chain ◽  
Backward Integration

Purpose The paper aims to research the current understanding of Slow Food in the Indian hospitality sector and to identify how the industry can embrace the concept and its sustainability. To begin, underpinnings are considered in relation to traditional, locally produced food for patrons that is actually “farm to fork” in terms of its delivery model as evidenced by backward integration in the supply of key ingredients. The economics of the backward integration is analysed to measure its impact on businesses’ bottom-line in the context of an inflationary economy. Design/methodology/approach Existing published literature is reviewed with reference to the “Slow Food movement” from both an international and Indian perspective. Vedatya’s approach to sustainable culinary value chain creation and its applicability for industry adoption with an intent to offer Slow Food on commercial menus is documented and discussed. A round table discussion with key food and beverage leaders is also documented and analysed to establish the current state of awareness and readiness of the sector to offer “Slow Food” through an integrated supply chain in India. Findings Slow Food as a concept is new to India; there is a huge shift in many parts of the world towards food that is fresh, traditional and drawn from locally available ingredients. This research shares Vedatya’s experience in developing an integrated value chain that can provide a sustainable Slow Food model for the Indian hospitality and restaurant sector to deploy with a positive impact on profitability too. Research limitations/implications There is need for more research to better understand the feasibility of hospitality businesses working on supply chain with backward integration, to offer “Slow Food” to consumers. While there seems to be a demand for traditional food, this paper does not research that aspect; further research is required to ascertain the potential demand for Slow Food in India. Practical implications The popularity of Slow Food is global; however, the Indian hospitality sector is yet to warm up to this potential. The customer focus on healthy, traditional, fresh food opens an opportunity to innovate, and businesses that build capacity to offer real farm-to-fork menus can become market leaders and will reap bottom-line benefits through lower input costs because of supply chain integration. Originality/value This paper is unique in terms of offering a discussion on the potential of Slow Food as the next realm of culinary innovation in India. It also adds value by sharing the Vedatya experience in terms of developing an integrated supply chain that facilitates the Slow Food offering in a farm-to-fork format. The model can be emulated by commercial hospitality businesses resulting in cost advantages and higher satisfaction levels of customers.

Investigating the impact of inventory inaccuracy on the bullwhip effect in RFID-enabled supply chains using colored petri nets

2019 ◽  
Vol 14 (2) ◽  
pp. 360-384 ◽  
Author(s):  
Maria Drakaki ◽  
Panagiotis Tzionas
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Petri Nets ◽  
Information Sharing ◽  
Bullwhip Effect ◽  
Colored Petri Nets ◽  
Content Type ◽  
Multi Stage ◽  
The Impact ◽  
Serial Supply Chains

PurposeInformation distortion results in demand variance amplification in upstream supply chain members, known as the bullwhip effect, and inventory inaccuracy in the inventory records. As inventory inaccuracy contributes to the bullwhip effect, the purpose of this paper is to investigate the impact of inventory inaccuracy on the bullwhip effect in radio-frequency identification (RFID)-enabled supply chains and, in this context, to evaluate supply chain performance because of the RFID technology.Design/methodology/approachA simulation modeling method based on hierarchical timed colored petri nets is presented to model inventory management in multi-stage serial supply chains subject to inventory inaccuracy for various traditional and information sharing configurations in the presence and absence of RFID. Validation of the method is done by comparing results obtained for the bullwhip effect with published literature results.FindingsThe bullwhip effect is increased in RFID-enabled multi-stage serial supply chains subject to inventory inaccuracy. The information sharing supply chain is more sensitive to the impact of inventory inaccuracy.Research limitations/implicationsInformation sharing involves collaboration in market demand and inventory inaccuracy, whereas RFID is implemented by all echelons. To obtain the full benefits of RFID adoption and collaboration, different collaboration strategies should be investigated.Originality/valueColored petri nets simulation modeling of the inventory management process is a novel approach to study supply chain dynamics. In the context of inventory errors, information on RFID impact on the dynamic behavior of multi-stage serial supply chains is provided.

scholarly journals Exploring blockchain implementation in the supply chain

2019 ◽  
Vol 39 (6/7/8) ◽  
pp. 829-859 ◽  
Author(s):  
Remko van Hoek
Keyword(s):  
Supply Chain ◽  
Empirical Research ◽  
Design Methodology ◽  
Managerial Decision ◽  
Implementation Framework ◽  
Managerial Decision Making ◽  
Content Type ◽  
Multi Stage ◽  
Implementation Stage ◽  
Initial Exploration

Purpose There is great interest in blockchain in the supply chain yet there is little empirical research to support the consideration of the technology. Ferdows (2018) calls for research aimed at learning from pioneers in the field and Gartner points out that the interest in blockchain holds similarities to the interest surrounding RFID 15 years ago. As a result, there may be opportunities to leverage insights from RFID research to inform the consideration of blockchain. The purpose of this paper is to explore how the Reyes et al. (2016) framework for the implementation of RFID may inform the consideration of blockchain in the supply chain. Design/methodology/approach A two-stage approach is used to explore RFID implementation considerations from the Reyes et al. (2016) RFID implementation framework, using an initial exploration of managers interested in blockchain using a focus group and a survey and to more in depth explore three case companies pioneering blockchain. Findings Several RFID implementation considerations can inform the consideration of blockchain but there are also differences in considering blockchain. A framework is developed that details considerations found to be relevant by implementation stage. Originality/value This paper adds to the limited amount of empirical research on blockchain in the supply chain and advances research beyond the consideration of use cases into the exploration of actual implementation of blockchain in the supply chain. The decision framework developed both leverages and nuances findings from RFID research and can inform managerial decision making. It also adds to research a multi-stage approach to implementation and uncovers rich opportunity to further learn from pioneers.

scholarly journals Optimization Of Raw Material Inventory Costs In The Food Supply Chain Using Differential Evolution Algorithm

2018 ◽  
Vol 73 ◽  
pp. 13016
Author(s):  
Mara Huriga Priymasiwi ◽  
Mustafid
Keyword(s):  
Supply Chain ◽  
Differential Evolution ◽  
Food Industry ◽  
Differential Evolution Algorithm ◽  
Optimization Method ◽  
Raw Material ◽  
Inventory Cost ◽  
De Algorithm ◽  
Material Requirement ◽  
Total Inventory

The management of raw material inventory is used to overcome the problems occuring especially in the food industry to achieve effectiveness, timeliness, and high service levels which are contrary to the problem of effectiveness and cost efficiency. The inventory control system is built to achieve the optimization of raw material inventory cost in the supply chain in food industry. This research represents Differential Evolution (DE) algorithm as optimization method by minimizing total inventory based on amount of raw material requirement, purchasing cost, saefty stock and reorder time. With the population size, the parameters of mutation control, crossover parameters and the number of iterations respectively 80, 0.8, 0.5, 200. With the amount of safety stock at the company 7213.95 obtained a total inventory cost decrease of 39.95%. Result indicate that the use of DE algorithm help providein efficient amount, time and cost.

scholarly journals Inventory Model with Partial Backordering When Backordered Customers Delay Purchase after Stockout-Restoration

2016 ◽  
Vol 2016 ◽  
pp. 1-16
Author(s):  
Ren-Qian Zhang ◽  
Yan-Liang Wu ◽  
Wei-Guo Fang ◽  
Wen-Hui Zhou
Keyword(s):  
Layer Structure ◽  
Inventory Model ◽  
Inventory Cost ◽  
Cost Component ◽  
Lipschitz Optimization ◽  
Partial Backordering ◽  
Demand Rate ◽  
Holding Cost ◽  
Total Inventory ◽  
Inventory Holding

Many inventory models with partial backordering assume that the backordered demand must be filled instantly after stockout restoration. In practice, however, the backordered customers may successively revisit the store because of the purchase delay behavior, producing a limited backorder demand rate and resulting in an extra inventory holding cost. Hence, in this paper we formulate the inventory model with partial backordering considering the purchase delay of the backordered customers and assuming that the backorder demand rate is proportional to the remaining backordered demand. Particularly, we model the problem by introducing a new inventory cost component of holding the backordered items, which has not been considered in the existing models. We propose an algorithm with a two-layer structure based on Lipschitz Optimization (LO) to minimize the total inventory cost. Numerical experiments show that the proposed algorithm outperforms two benchmarks in both optimality and efficiency. We also observe that the earlier the backordered customer revisits the store, the smaller the inventory cost and the fill rate are, but the longer the order cycle is. In addition, if the backordered customers revisit the store without too much delay, the basic EOQ with partial backordering approximates our model very well.

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