Title: Optimal and heuristic base-stock levels and review periods in a serial Supply Chain

Authors: P.V. Rajendra Sethupathi, Chandrasekharan Rajendran

Addresses: Department of Management Studies, Indian Institute of Technology Madras, Chennai, India. ' Department of Management Studies, Indian Institute of Technology Madras, Chennai, India

Abstract: A key issue in a Supply Chain (SC) concerns the control policy to determine the optimal order-up-to levels or base-stock levels and review periods. In this study, a mathematical model is developed to determine the optimal installation or local base-stock levels and review periods for every member in the SC that uses periodic-review order-up-to (S) policy, with the consideration of the ordering cost at every installation. Our model considers four members, namely, a supplier, a manufacturer, a distributor and a retailer. We obtain optimal review periods and base-stock levels (in the class of order-up-to policy) for different SC settings. In addition, two Genetic Algorithms (GAs) have been developed to determine the best base-stock levels and review periods for all members in the SC.

Keywords: serial supply chains; SCM; supply chain management; inventory management; genetic algorithms; optimal base-stock levels; heuristic base-stock levels; review periods; mathematical programming; order-up-to levels; periodic reviews; ordering costs; suppliers; distribution; retailing; manufacturing; logistics systems; logistics management.

DOI: 10.1504/IJLSM.2010.034423

International Journal of Logistics Systems and Management, 2010 Vol.7 No.2, pp.133 - 164

Published online: 03 Aug 2010 *

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