Saving Concepts in Supply Chain Management: A Study on Inventory and Transportation Costs (original) (raw)

Optimal Routing in Supply Chain Aimed at Minimizing Vehicle Cost and Supply

Transportation plays a vital role in supply chain. An inefficient transportation system disrupts supply chain and imposes severe damages to it. This paper investigates a transportation model with a limited number of vehicles with different capacities. The vehicles are used to handle raw and semi-finished materials from contractors' warehouses to the main factories and to transport finished products to the warehouses of the distribution companies. The main purpose was to cover all transportation requests in a manner that it results in a reduced transportation cost, a reduced use of rental vehicles, and a reduced stopping duration of vehicle in destinations through the optimal use of available resources. In the considered model, first, a web-based system was designed in order to enable the registration of handling requests in the system with the purpose of compensating vehicle shortage. The handling requests are confirmed by drivers and transportation companies through SMS, email, and internet. Then, the proposed model performs network routing in order to completely cover the transportation network and to reduce transportation costs and vehicles stopping duration in destination. Finally, the model was run in different conditions, and the possibility of increasing vehicles with the purpose of reducing costs was studied.

Cutting logistics Costs with an Optimal distribution with Balancing approach and Cost minimization: A Case Study Model in one Producer-multiple Warehouses Condition in Supply chain management

2015

Logistics as a part of supply chainis a process of creating value through scheduling and stock locating. Increasing competitive conditions in the market of goods and services supply and main advancements of communicative and IT industries have caused suppliers, producers and distributors to focus highly on logistics systems to decrease costs and improve customers' services (providing the product in the right time and place for the customer). To this end, internal and external logistics costs (products`products`final distribution) and total cost in logistics system is a key factor to improve management performance. In the present study, it has been attempted to decrease total transport cost by selecting the appropriate capacity of transportation. Then, forkliftare optimally allocated to each department based on measured time per minute to do transport operations related to a transport cycle through each forklift in each department at assembly saloon. Afterwards, the most optimal ...

Practical inventory routing: A problem definition and an optimization method

Computing Research Repository - CORR, 2011

The global objective of this work is to provide practical optimization methods to companies involved in inventory routing problems, taking into account this new type of data. Also, companies are sometimes not able to deal with changing plans every period and would like to adopt regular structures for serving customers.

Application of Transportation Model for Optimal Product Distribution Chain Management

2021

Many business organizations are operating at an unacceptable high distribution chain costs even as industrial competition continues to pose as a major challenge to business success. Linear programming devices can help organizations achieve efficiency. This research aims at establishing the impact of Transportation algorithm in optimal product distribution and scheduling of business organizations. In a field study of NOWAS Oil and Gas, data was significantly secondary sourced, resulting from indepth analysis of existing documented content materials on the subject. Practical application of the least cost method scheduling and North West Corner Rule method of an initial basic feasible solution was imminent. Revising that solution using the stepping stone method translated to an optimal distribution schedule and a minimum cost profit in yearly distribution schedule of Nowas Oil and Gas, Enugu. It is recommended that business organizations carryout careful analysis of their supply and de...

Multilevel inventory management decisions with transportation cost consideration

Transportation Research Part E-logistics and Transportation Review, 2010

In this article we address specific inventory management decisions with transportation cost consideration in a multi-level environment consisting of a supplier-warehouse-retailers. We develop two models -namely, decentralized ordering model and centralized ordering model to investigate the effect of collective ordering by retailers on the total inventory cost of the system. A numerical study shows that the proposed model is robust and generates reasonable cost savings. The models have potential in several multi-level applications such as fresh or frozen food delivery to stores of different supermarkets or the supply of medicine to a number of hospitals from a wholesaler.

The Production-Inventory-Distribution-Routing Problem An integrated formulation and solution framework

2015 International Conference on Industrial Engineering and Operations Management (IEOM), 2015

Supply chain management includes several functions that are planned and managed to improve the total performance of the supply chain, the general objective is to minimize system-wide costs while satisfying service level requirements. Previously, each function was addressed as an isolated problem, however, it was found that focusing on cost minimization in one area of the supply chain often leads to higher costs in other areas; this is why the integration of different supply chain management functions has received increasing consideration recently. The production-inventory-distribution-routing integrated planning is a step forward towards more integration and realism in supply chain management, as it integrates lot-sizing, inventory management, distribution planning, and vehicle routing problems. In this paper, a review of the recent literature addressing the joint consideration of these aspects is presented and research gaps are highlighted. It was noticed that the existing models tackle relatively simple cases. However, in real life, more complex systems and variants exist. To make a step forward, a generic problem description and a mathematical model are proposed to address the production-inventory-distribution-routing problem. Finally, a conceptual framework is presented to illustrate the existing and potential work in this topic; this framework is expected to provide good directions for researchers to work in this area.

OPTIMIZATION OF SUPPLY CHAIN LOGISTICS COST

Taking Six Sigma approach and using Operation Research theories of transportation models, this paper attempts to optimize the Inbound Logistic cost of Product (Four Wheeler) for an Automobile OEM. The suggested theories and concepts are used to develop a two dimensional matrix to understand the sensitivity of Raw materials’ (Components) distance and volumetric weight upon the Logistics cost. The Paper analyses the outcome or alternatives of Transportation model using Qualitative research methods from the perspective of the overall Product cost

Determination of inventory replenishment policy with the open vehicle routing concept in a multi-depot and multi-retailer distribution system

Engineering and Applied Science Research, 2018

The Inventory Open Vehicle Routing Problem (IOVRP) involves decisions in inventory replenishment and vehicle routing of a system having multiple depots and multiple retailers. The research objective of this work is to develop practical replenishment decisions by applying meta-heuristics of an Ant Colony Algorithm. The routing solutions applying IOVRP and an Inventory Routing Problem (IRP) that are solved and compared to measure the methods’ performance. The result shows that the IOVRP gives 24.66% better solutions in term of total costs than the IRP. Additionally, sensitivity analysis of related factors, i.e., inventory holding costs, ordering cost and vehicle capacity, was performed on the percentage deviation of total costs. Based on the analysis of variance, there is an advantage of IOVRP over IRP when the problem involves small vehicle capacity, low ordering costs, and high holding costs.

A Generic Mathematical Model to Optimize the Integrted Production, Inventory and Distribution Decisions in Supply Chains

The Egyptian International Journal of Engineering Sciences and Technology, 2016

Integration of decisions in supply chain management has received increasing consideration recently. The Production-Inventory-Distribution-Routing Problem (PIDRP) is a recent and complex problem that integrates decisions on lot-sizing, inventory management, distribution planning, and vehicle routing problems. In this paper, a generic problem description is given and a Mixed-Integer Programming model (MIP) is proposed to solve the PIDRP, the objective is to minimize the total cost of the combined functions while satisfying the required service levels. The proposed model contributes to the existing literature since it deals with multiple products, split deliveries, a heterogeneous fleet of vehicles, and puts a limit on the duration of the route performed by each vehicle. The proposed model was successfully validated and tested by using small-sized instances from literature. Also, a sensitivity analysis was performed to investigate the effect of estimated parameters on the model results.

A bi-objective integrated transportation and inventory management under a supply chain network considering multiple distribution networks

RAIRO - Operations Research

In order to respond to the customer’s needs effectively and efficiently, logistics is characterized as a part of the supply chain that executes and handles forward and reverse movement and storage of products, services, and related data. An efficient logistic network is needed for the supply chain that executes forward and reverses products’ movement. This study resolves the supply chain network’s logistic problem to determine the appropriate order allocation of products from multiple plants, warehouses, and distributors to minimize total transportation and inventory costs by simultaneously determining optimal locations, flows, shipment composition, and shipment cycle times. The multi-objective logistic cost minimizes through the value function approach for obtaining the optimal order allocation. An actual data-based case study has been applied to examine the effectiveness of the multi-objective supply chain network. These results are very relevant for the manufacturing sectors, par...