Inventory Routing Problem in VMI & TPL Supply  Chain under Centralized Control

Abstract

Abstract: A supply chain composed of many vendors, one third-party logistics (TPL), and one manufacturer is addressed. It assumes that, in such a supply chain, it integrates vendor-managed inventory (VMI) and TPL. For such a supply chain, inventory routing problem under centralized control is studied. How to make the decision of replenishing and vehicle routing plan for suppliers and TPL is a challenging problem. Based on rolling plan period, a new inventory routing model is developed. With the NP-complete nature of the inventory routing problem, a four-step heuristic algorithm based on simulated annealing is presented. The feasibility and effectiveness of the proposed heuristic algorithm is testified by a numerical example.

Key words: inventory routing problem, vendor-managed inventory (VMI), third-party logistics (TPL), centralized control

Tang Zhong-ming. Inventory Routing Problem in VMI & TPL Supply Chain under Centralized Control[J]. Industrial Engineering Journal , 2013, 16(2): 19-25.

References

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Inventory Routing Problem in VMI & TPL Supply Chain under Centralized Control

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