Logistic resources allocation in supply chains: a utility decentralised optimisation approach Online publication date: Wed, 25-Nov-2020
by Doraid Dalalah
International Journal of Logistics Systems and Management (IJLSM), Vol. 37, No. 3, 2020
Abstract: In this paper, a continuous review policy in a supply chain is considered in which risk averse suppliers ship products to their corresponding retailers. The suppliers non-cooperatively compete by acquiring more logistic resources of the supply chain to satisfy the random retailers' demand so as to increase their benefits in a decentralised manner. An optimisation problem is formulated to model this SC with two main constraints: the demand and the stocking delays. The solution allocates the suitable shipping rates that increase the social benefit of the supply chain players. Different experiments were conducted to validate and demonstrate the merits of the model. It was found that the shipping protocol employed at the supplier side rapidly drives the SC to optimal shipping rates that maximise the utilities in decentralised approach. The model can be applied to fast response supply chains such as short shelf-life products, food supply chains, blood supply chains and perishable items.
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