Decision support system for vendor managed inventory supply chain: A case study

Atul B. Borade*, Edward Sweeney

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

35 Citations (Scopus)

Abstract

Vendor-managed inventory (VMI) is a widely used collaborative inventory management policy in which manufacturers manages the inventory of retailers and takes responsibility for making decisions related to the timing and extent of inventory replenishment. VMI partnerships help organisations to reduce demand variability, inventory holding and distribution costs. This study provides empirical evidence that significant economic benefits can be achieved with the use of a genetic algorithm (GA)-based decision support system (DSS) in a VMI supply chain. A two-stage serial supply chain in which retailers and their supplier are operating VMI in an uncertain demand environment is studied. Performance was measured in terms of cost, profit, stockouts and service levels. The results generated from GA-based model were compared to traditional alternatives. The study found that the GA-based approach outperformed traditional methods and its use can be economically justified in small- and medium-sized enterprises (SMEs).

Original languageEnglish
Pages (from-to)4789-4818
Number of pages30
JournalInternational Journal of Production Research
Volume53
Issue number16
DOIs
Publication statusPublished - 18 Aug 2015

Keywords

  • case study
  • decision support system
  • genetic algorithm
  • vendor-managed inventory

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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