Replenishment And Shipment Policy In VMI Supply Chain With Transportation Capacity

VMI (Vendor-managed Inventory, VMI) is a systematic method for inventory management in the supply chain management. In the VMI mode, the supplier manages the inventory in the whole chain. On the one hand, the supplier needs to replenish inventory from the upper manufacturers, including deciding replenishment time and quantity. On the other hand, the supplier needs to dispatch products to meet retailers'demand, including deciding dispatch time and quantity. There are many factors influencing VMI implementation. And how to make replenishment and dispatch policy to optimize the VMI supply chain is one of the most critical challenges faced by the supplier.Through systematically reviewing the literatures about VMI theory, replenishment and dispatch policies and transportation capacity constraints at home and abroad, this thesis firstly elaborated on the significance of the integration of VMI replenishment and shipment, operational process and key factors of the implementation. Then considering a VMI supply chain with a supplier and many retailers, in the case that the supplier has limited transportation capacity and could use outsourcing policy, the thesis investigated the problems on the replenishment and dispatching policies in VMI supply chain with transportation capacity in the dynamic and stochastic demand environments. In the dynamic demand environment, it concluded that the structure of the optimal solution met the"Zero-Inventory-Order"property. A O(T3) polynomial algorithm was developed to solve the problem using the dynamic programming approach, also the optimal transportation mode in the delivery cycle was obtained through trading off various cost. And an example was used to verify the effectiveness of the policy. In the stochastic demand environment, the thesis constructed the expected long-term average costs minimization model through analyzing the supplier's expected replenishment cycle, and the various expected costs occurred in the single replenishment cycle. Furthermore the problem was solved by using differential evolution algorithm. Finally, an example was also used to verified, and the influence of the various cost parameters on replenishment and delivery frequency, the total supply chain cost were studied. The results are helpful for the decision-making of the replenishment and shipment scheduling in VMI implementation.