Authors: Ganesh Subramaniam, Abhijit Gosavi
Addresses: American Solutions Inc., 100 Commerce Dr Suite # 103, Newark, DE 19713, USA. ' Simulation-Optimization Laboratory, Department of Industrial Engineering, State University of New York at Buffalo, 317 Bell Hall, Buffalo, NY 14260-2050, USA
Abstract: This paper examines a problem related to replenishing inventories at retailers in distribution networks operated under the paradigm of Vendor Managed Inventory (VMI). In the real world, complexity in analysing such systems arises out of numerous factors, including several random variables and a multitude of costs in the system. Much of the literature makes simplifying assumptions about these factors to develop tractable mathematical models. In this paper, we develop a simulation-optimisation approach that can accommodate most of these factors. In our experiments, our approach outperforms a heuristic used in a local industry and a heuristic developed from the newsvendor model.
Keywords: retailer networks; supply chain management; SCM; simulation; optimisation; vendor managed inventory; VMI; material dispatching; inventory replenishment.
International Journal of Simulation and Process Modelling, 2007 Vol.3 No.4, pp.238 - 245
Published online: 16 Dec 2007 *Full-text access for editors Access for subscribers Purchase this article Comment on this article