A DYNAMIC SUPPLY CHAIN INVENTORY MODEL CONSIDERING SUPPLIER SELECTION, JOINT REPLENISHMENT AND TRANSPORTATION COST

Open Access
Author:
Li, Chenxi
Graduate Program:
Industrial Engineering
Degree:
Master of Science
Document Type:
Master Thesis
Date of Defense:
None
Committee Members:
  • Jose Antonio Ventura, Thesis Advisor
Keywords:
  • Serial Supply Chain Multi-product Joint Replenishment Integrated
Abstract:
Companies currently face fierce global competition and so they must improve their supply chain efficiency. The development of appropriate decision support tools is important to enable such improvements. The thesis presents a multi-period inventory lot-sizing model for multiple products in a serial supply chain, where raw materials are purchased from multiple suppliers at the first stage, and external demand from vendors occurs at the last stage. Joint replenishment is considered when ordering raw materials. The demand is known and may change from period to period. Stages of this production-distribution serial structure correspond to inventory locations. The first two stages stand for storage areas holding raw materials and finished products in a manufacturing facility; additional intermediate stages represent either manufacturing facilities or centralized warehouses. The last stage is a distribution center that directly serves customer demand. The problem is modeled as a time-expanded transshipment network, which is defined by the nodes and arcs that can be reached by feasible material flows. At first, an integrated approach model aimed at minimizing total cost of the entire supply chain is developed to determine dynamic supplier selection and inventory planning policy at the same time. In addition, a sequential approach model is developed so that inventory planning policy is solved first, and supplier selection strategy is obtained according to that. A comparison between integrated and sequential approaches is shown in the thesis; sensitivity analysis on key factors for the integrated model is presented as well. Results show that total cost is reduced under integrated approach, while major and minor ordering costs, and transportation cost are important for supplier selection under the integrated approach.