Parameter Optimization of VMI System in a Manufacturer and Multi Retailer Using Genetic Algorithm

E-ISSN： 1662-8985|2015|1115|622-626

ISSN： 1022-6680

Source： Advanced Materials Research, Vol.2015, Iss.1115, 2015-08, pp. : 622-626

Disclaimer: Any content in publications that violate the sovereignty, the constitution or regulations of the PRC is not accepted or approved by CNPIEC.

Previous Menu Next

Abstract

This paper presents product marketing and inventory policy for a manufacturer and multi-retailer system under vendor managed inventory (VMI) mode of operation. The aim is to maximize individual profit where each firm interacted through decentralised supply chain. For this reason, the manufacturer often considers managing the system-wide inventories by determining replenishment cycles, backorder quantity, wholesale price, and advertising investment. Also, due to the information-asymmetric VMI, retailers sequentially need to determine their optimal retail prices and advertisement policies. In order to find the optimal solution i.e. better profit equilibrium for all supply chain channel, a Genetic Algorithm is proposed in this study. The proposed algorithm is assessed for its solution quality. Furthermore, the performance evaluations are given, to present an improvement to the model.