A coordinated two-phase approach for operational decisions with vehicle routing in a single-vendor multi-buyer system

This study considers a two-echelon system in which a vendor produces a product at a finite production rate and supplies it to several buyers facing independent normally-distributed demands. The product is delivered to the buyers using a set of different speed vehicles with identical capacity and dif...

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Bibliographic Details
Published in:International journal of production research 2013-03, Vol.51 (5), p.1426-1450
Main Authors: Jha, J.K., Shanker, Kripa
Format: Article
Language:English
Subjects:
controllable lead time
Coordination
Decision making models
Deliveries
Distribution planning
Lead time
Mathematical analysis
Mathematical models
multi-buyer
Operating costs
Optimization
Routes
service level constraint
Stockpiling
Studies
Transportation
vehicle routing
Vehicles
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Summary:This study considers a two-echelon system in which a vendor produces a product at a finite production rate and supplies it to several buyers facing independent normally-distributed demands. The product is delivered to the buyers using a set of different speed vehicles with identical capacity and different operating costs. The issues of lead time reduction and the service level constraint on the buyers have been incorporated in the model. A model is formulated to determine the optimal production-inventory policy, vehicle routes and vehicle type for each route by minimising the related production, inventory, lead time crashing and transportation costs of the system while satisfying the service level constraint on each buyer. A coordinated two-phase iterative approach is proposed to solve the model. Finally, a numerical example is included to describe the solution approach and illustrate the results.
ISSN:0020-7543
1366-588X
DOI:10.1080/00207543.2012.693962