Distribution policy in an M-store regional supply chain

Document Type

Article

Publication Date

1-1-2010

Abstract

The Regional Supply Chain Replenishment problem consists of one warehouse distributing one product to M-stores. Here, we assume the store demand is independent and normally distributed. There is one truck at the warehouse, which makes one replenishment trip to one store per period. Based on the store inventory level, the warehouse makes two decisions in each period: which store to replenish and the replenishment quantity. The objective is to position regional inventory to minimise lost sales. Two heuristic solutions are presented. The BL-Heuristic is easily implemented but performs well when demand variance is low. The AD-Heuristic uses an LP model to prescribe a replenishment plan. The key factor in the AD-Heuristic is the demand buffer factor K, and a simulation method for deriving K is proposed. The efficiency of the AD-Heuristic was tested, and its performance stays consistently within 5% of the adjusted lower bound. Copyright © 2010 Inderscience Enterprises Ltd.

Identifier

77954411272 (Scopus)

Publication Title

International Journal of Integrated Supply Management

External Full Text Location

https://doi.org/10.1504/IJISM.2010.033976

e-ISSN

17418097

ISSN

14775360

First Page

214

Last Page

238

Issue

3

Volume

5

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