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1、Inventory/distribution control system in a one-warehouse/multi-retailer supply chainChumpol Monthatipkula,1, Pisal Yenradeeb,*AbstractThis paper proposes a new inventory control system called the inventory/distribution plan(IDP)control system for a one-warehouse/multi-retailer supply chain.In the sy
2、stem,a proposed mixed-integer linear programming model is solved to determine an optimal IDP control system,a proposed mixed-integer linear programming model is solved to determine an optimal IDP that controls the inventories of the supply chain.The efficiency of the IDP control system is compared t
3、o that of the echelon-stock R,s,S control policy,where R is a periodic review interval,s is a reorder point,and S is an order-up-to level,at various fillrates.The experimental results show that when the system faces non-stationary demands,the IDP control system significantly outperforms the echelon-
4、stock R,s,S control system because it can give lower total costs for all ranges of fill rates.Keywords:Inventory/distribution plan; One-warehouse/multiple retailers; Supply chain；Mixed-integer linear programming1.Introduction In Supply Chain Management(SCM),the inventory control problem is very comp
5、licated and challenging because the planner needs to consider several factors,for example,supply chain structures,coordination levels,and information sharing processes.The inventory control policy used by each entity is also an important factor because it affects the inventory replenishment process
6、of the upstream entity.The upstream demand may be distorted and far from the actual demand faced by the downstream entity.This phenomenon is known as the Bullwhip Effect,which is presented in Forrester(1961).Many classical inventory control systems(s,Q,s,S,R,S,R,Q,and R,s,S,etc.where s,Q,S,and R den
7、ote reorder points,reorder quantities,order-up-to levels,and periodic review periods,respectively)are still used in the supply chain environment.However,determination of their control parameters is very difficult.For SCM,all entities in the supply chain should be planned and controlled simultaneousl
8、y to obtain goodcontrol parameters and low inventory costs.The aim of this paper is to develop a new inventory control system called the inventory/distribution plan(IDP)control system that determines optimal product flow through a one-warehouse/multi-retailer supply chain under both stationary and n
9、on-stationary uncertain demand situations.The IDP control system controls each supply chain member using the optimal IDP operating under a one-period rolling horizon planning strategy.The optimal IDP is obtained by solving a proposed mixed-integer linear programming model.The performance of the prop
10、osed IDP control system is compared with that of the echelon-stock R,s,S control policy since both systems are similar in manyaspects.The main contribution of this paper is the development of IDP control system thathas good performances under both stationary and nonstationary uncertain demand situat
11、ions.This paper also proposes a practical way to determine appropriate safety stock factors at the warehouse and retailers that yield relatively low total costs while maintaining relativelyhigh fill rates.1.1.Literature reviewThis paper involves two main streams of research:(a)proposing new inventor
12、y control systems and(b)determining suitable control parameters of classicalinventory control systems.Therefore,the literature review is presented in two main subsections.(a)Literature review proposing inventory control systems:So far,many researches including this paper have focused on proposing ne
13、w inventory control systems or improving classical inventory control systems,and also comparing their proposed/improved systems to a classical inventory control system.Yoo et al.(1997) proposed an improved Distribution Resource Planning(DRP)method using concepts of installation-stock s,Q and R,S sys
14、tems.The order quantities and order points are dynamically determined to meet the demand in a just-in-time concept and minimize the out-of-stock probability.In the improved system,regional distribution centers can make a decision to reduce the related costsorder only the amount available or postpone
15、 the ordering. Based on experiments,the proposed system out performs he classical DRP.Another relevant research work belongs to De Kok andFransoo(2003).The authors proposed the so-called Synchronized Based Stock(SBS)policy and compared its performance to the LP-based system under the backlogging mod
16、el.The SBS, which uses the base-stock-policy concept,raises the inventory position to meet the adjustable target level in every inventory review.It is concluded that the SBS outperforms the LP-based system considerably because it uses more sophisticated ordering method and rationing rule.Ganeshan et al.(2001)studied two inventorycontrol systems,namely,DRP and Reorder Point systems in a four-echelon network.TheDRP system refers to a calculation of upstream reorder quantitie
