A model of supply chain with possible transshipmens between retails |
A supply chain with three stages - manufacturer, distributor and retail facilities - is considered. Stochastic demand is met on retail level. Retail facilities replenish their inventory periodically from the distribution centre and this is supplied from manufacturer on a periodical basis. Retail inventory is reviewed at the end of each period and new order is placed to the distribution centre. The following two supplying replenishment rules are considered: a) there is no transshipment between retails, and b) transshipment between retails is allowed. A mathematical model was developed for minimizing total inventory cost when demand is deterministic. The model was implemented using the AMPL modelling language. Optimal solutions for different scenarios, i.e. different sets of deterministic demand, are obtained using this model. These solutions are used as input data for new model which finds a compromise solution to minimizing the total regret. The total regret is defined as the sum of the differences between the total inventory cost obtained using compromise solution and the total inventory cost obtained using optimal solution for a given scenario. Experimental results show that implementing transshipment between retails may reduce total inventory cost.
Mohamed Abu Gaben, Slobodan Krčevinac, Mirko Vujošević |