983 research outputs found

    Analysing the effectiveness of vendor-managed inventory in a single-warehouse, multiple-retailer system

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    This paper considers a two-stage supply chain, consisting of a single warehouse and multiple retailers facing deterministic demands, under a vendor-managed inventory (VMI) policy.It presents a two-phase optimisation approach for coordinating the shipments in this VMI system.The first phase uses direct shipping from the supplier to all retailers to minimise the overall inventory costs.Then, in the second phase, the retailers are clustered using a construction heuristic in order to optimise the transportation costs while satisfying some additional restrictions.The improvement of the system's performance through coordinated VMI replenishments against the system with direct shipping only is shown and discussed in the comparative analysis section

    Multiple order-up-to policy for mitigating bullwhip effect in supply chain network

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    This paper proposes a multiple order-up-to policy based inventory replenishment scheme to mitigate the bullwhip effect in a multi-stage supply chain scenario, where various transportation modes are available between the supply chain (SC) participants. The proposed policy is similar to the fixed order-up-to policy approach where replenishment decision “how much to order” is made periodically on the basis of the predecided order-up-to inventory level. In the proposed policy, optimal multiple order-up-to levels are assigned to each SC participants, which provides decision making reference point for deciding the transportation related order quantity. Subsequently, a mathematical model is established to define optimal multiple order-up-to levels for each SC participants that aims to maximize overall profit from the SC network. In parallel, the model ensures the control over supply chain pipeline inventory, high satisfaction of customer demand and enables timely utilization of available transportation modes. Findings from the various numerical datasets including stochastic customer demand and lead times validate that—the proposed optimal multiple order-up-to policy based inventory replenishment scheme can be a viable alternative for mitigating the bullwhip effect and well-coordinated SC. Moreover, determining the multiple order-up-to levels is a NP hard combinatorial optimization problem. It is found that the implementation of new emerging optimization algorithm named bacterial foraging algorithm (BFA) has presented superior optimization performances. The robustness and applicability of the BFA algorithm are further validated statistically by employing the percentage heuristic gap and two-way ANOVA analysis

    On the inventory routing problem with stationary stochastic demand rate

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    One of the most significant paradigm shifts of present business management is that individual businesses no longer participate as solely independent entities, but rather as supply chains (Lambert and Cooper, 2000). Therefore, the management of multiple relationships across the supply chain such as flow of materials, information, and finances is being referred to as supply chain management (SCM). SCM involves coordinating and integrating these multiple relationships within and among companies, so that it can improve the global performance of the supply chain. In this dissertation, we discuss the issue of integrating the two processes in the supply chain related, respectively, to inventory management and routing policies. The challenging problem of coordinating the inventory management and transportation planning decisions in the same time, is known as the inventory routing problem (IRP). The IRP is one of the challenging optimization problems in logis-tics and supply chain management. It aims at optimally integrating inventory control and vehicle routing operations in a supply network. In general, IRP arises as an underlying optimization problem in situations involving simultaneous optimization of inventory and distribution decisions. Its main goal is to determine an optimal distribution policy, consisting of a set of vehicle routes, delivery quantities and delivery times that minimizes the total inventory holding and transportation costs. This is a typical logistical optimization problem that arises in supply chains implementing a vendor managed inventory (VMI) policy. VMI is an agreement between a supplier and his regular retailers according to which retailers agree to the alternative that the supplier decides the timing and size of the deliveries. This agreement grants the supplier the full authority to manage inventories at his retailers'. This allows the supplier to act proactively and take responsibility for the inventory management of his regular retailers, instead of reacting to the orders placed by these retailers. In practice, implementing policies such as VMI has proven to considerably improve the overall performance of the supply network, see for example Lee and Seungjin (2008), Andersson et al. (2010) and Coelho et al. (2014). This dissertation focuses mainly on the single-warehouse, multiple-retailer (SWMR) system, in which a supplier serves a set of retailers from a single warehouse. In the first situation, we assume that all retailers face a deterministic, constant demand rate and in the second condition, we assume that all retailers consume the product at a stochastic stationary rate. The primary objective is to decide when and how many units to be delivered from the supplier to the warehouse and from the warehouse to retailers so as to minimize total transportation and inventory holding costs over the finite horizon without any shortages

    The influence of promotional activity on supply chain stability: a fast moving consumer goods (FMCG) perspective.

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    Master of Commerce. University of KwaZulu-Natal, Pietermaritzburg, 2014.Today, most sales are stimulated at the point of purchase, so sales promotions are becoming a crucial element of any marketing campaign. The consequence of these promotions is the creation of unpredictable demand. The resultant instability has been termed the “Bullwhip Effect” (BWE). The BWE has a negative effect on business performance as it creates information distortions that cause excessive inventory holdings, higher overall costs, poor customer service and lost sales. An important strategy to achieve a smooth flowing supply chain is to mitigate or preferably eliminate the BWE. The aim of this research was to monitor the stock levels of a high value product flowing through the supply chain to determine whether marketing activities, such as promotions, contribute to increased instability in the chain. The study followed a case study approach and analysed the business activities of consumer packaged goods company (CPGC) “X” promoting their product “X”, an item of high value, with retailer “X”. The promotion was monitored in three phases. The phases included pre-promotion planning, execution of the promotion and post promotion analysis. The researcher employed both qualitative and quantitative research methods. The research established that the ROI on the promotion was greater than the target and that the retailer made an additional profit. However, when the assessment of ROI included more of the supply chain, there was a negative operating profit due to excess upstream inventory. The study confirmed that promotional activities contribute to the BWE and that this effect may be more pronounced with products of higher value. The phenomenon worsened as the distance of supply chain nodes from the real demand increased. This caused a major shift in ordering patterns and an altered total inventory pipe fill in the chain. The recommendations arising from this study are that the CPGC and retailer should implement a true scorecard and a joint business plan for those brands that have products of high value. Subsequently, a vendor managed inventory (VMI) system should be implemented. This will remove the retailer’s need to forecast and may prevent unstable ordering and delays due to cost avoidance. Shrinkage will be reduced as the CPGC would directly own, control and supply stock in the retailer’s DCs

    Cooperation in Supply Chain Networks: Motives, Outcomes, and Barriers

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    This paper analyzes the phenomenon of cooperation in modern supply chains in the light of Game Theory. We first provide a discussion on the meaning of cooperation in supply chains, its motives, outcomes and barriers. We then highlighted the applicability of Cooperative Game Theory as methodology for analyzing cooperation in supply chains. Second, we review recent studies that analyze the cooperation in supply chains by means of cooperative game theory. A special emphasis will be given inventory centralizations games. Finally, gaps in the literature are identified to clarify and to suggest future research opportunities

    Quantitative Models for Centralised Supply Chain Coordination

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    An assessment of the sustainability of E-fulfilment models for the delivery of fast moving consumer goods to the home

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    Online retail sales are growing rapidly and have captured a significant proportion of the retail market in many countries. Although companies are under mounting pressure to reduce their environmental impact, the environmental effect of the different online distribution strategies remains unclear. Most previous studies of this subject have only included partial effects and consequences. To enable a more holistic understanding, this study proposes a more inclusive framework of environmental assessment based on life cycle analysis. This was applied to fast moving consumer goods (FMCG). Previous studies have shown that the last mile delivery contributes significantly to the environmental impact of online retailing, mainly because of the nature of the home delivery operations, including narrow time windows and short order lead times. If consumers were to buy products online on a subscription basis and give the supplier more control over the replenishment process there might be less need for fast deliveries, creating opportunities to improve the efficiency of home deliveries and reduce their environmental impact. The study classified different forms of subscription arrangement, assessed their relative attractiveness to consumers and examined their likely impact on the supply chain. Consumer views on subscriptions were surveyed by means of focus group discussions and interviews. To assess the likely supply chain impacts of subscriptions, the literature on vendor-managed inventory was consulted. A Life-Cycle Assessment (LCA) model was built to quantify and compare the environmental impact of various e-fulfilment models for FMCG products in the United Kingdom. This study reveals that the method of execution have a large influence on the environmental impact. In store-based retailing, the energy consumption within the supermarket is a significant contributor to the total greenhouse gas emissions. On the other hand, some forms of home delivery, involving for example the use of parcel networks with no pre-agreed time-slots and relatively high rates of delivery failure and customer collection, are also carbon-intensive. This contribution of consumer trips to the total footprint is much smaller in case of van-based deliveries where pre-agreed time-windows are used. Regardless of the business model, the total carbon footprint per item depends heavily on the number of items per delivery. Consequently, companies or consumers looking to decrease the environmental impact of online shopping should maximise the number of items per delivery. The study concludes with an assessment of the strengths, weaknesses and possible environmental improvements of each of the efulfilment methods, taking account of the possible role of subscriptions

    An algorithm model for solving the single-period inventory transportation problems in the construction industry

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    Vendor managed inventory (VMI) is an illustration of effective partnering and collaboration practices between upstream and downstream points in a supply chain. VMI policy is an integrating decision between a supplier and the customers in which the supplier takes the accountability of sustaining the customers’ inventory while confirming that no stock-out. The supplier indicates when each delivery time takes place, so that the customers are no longer responses to the customers' orders. Under the VMI system, the planning is proactive as it is based on the available information rather than reactive to customers' orders. Consequently, in this paper, we expected that the demand at the construction sites are constant and stationary, and the construction consolidation centre (CCC) is implementing a VMI system. The concentration of this paper is to minimize the transportation and inventory holding costs of the customers for a two-stage supply chain system in the construction industry. The problem is to identify what is the delivery quantities to the construction sites, what is delivery times and which routes should be used to deliver products to the customers at the construction site for the single-period deterministic inventory routing problem (SP-DIRP) in the construction sector. Furthermore, realistic side-constraints such as driving time restrictions, storage capacities constraints and constant replacement intervals are considered. Results of a simplified real-life case implementing the proposed linear mixed-integer program are shown and discussed in detail

    Economic evaluation in decision models: a critical review and methodological propositions

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    International audienceDecision models of industrial management articles are often based on an economic criterion to find the proposed solution. They use economic parameters that are generally imported from the firm cost accounting system. When cost information is not adapted to the decision, the obtained solution of the model may be invalid. In this article, we deal with a critical literature review to report the methodological problems encountered in industrial management articles vis-à-vis the used costs. Finally we suggest methodological propositions to be kept in mind by authors when they are using costs in decision models
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