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Development of Location-Inventory Model in Dual Channel Supply Chain and Solving the Model by Tabu Search Algorithm

Baghestani, Hamideh | 2011

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 42723 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Hajji, Rasool
  7. Abstract:
  8. This thesis presents a location- inventory model for dual-channel supply chains .Dual-channel supply chains have two channels for sale the traditional in-store (retail) channel and the online (retail) channel.The model assigns online demands to the capacitated stores currently serving in-store demands. Keeping the delivery network of the in-store demands unchanged, the model aims at minimizing the summation of transportation cost, inventory cost, and fixed handling cost in the system while assigning the online demands. We assume that at the beginning of each period a distribution center which just distributes products to the stores, follows an order-up-to policy which increases the total supply chain inventory to a defined level of inventory (R) .So the policy of the order placement is (R,T=1).Two important assumptions have been considered. The first one is that we make the capacity constraint of each store flexible so if a store is selected for online sale, its capacity will increase and second one that we limit the number of stores that can do online sale.We formulate the location- inventory problem as a non-linear binary programming model. The assumptions have been considered both separately and simultaneously and also we consider the case that no one of the assumption has been considered. A tabu search algorithm has proposed to solve the model. Numerical experiments show the efficiency of our method. Furthermore, we find that because less number of stores is needed to be online, the flexible capacity constraint will decrease the costs. Results show that the derived policy can reduce 15% cost in average.We have illustrated by numerical examples that limiting the number of online stores in the capacitated assignment model may make the model impossible but if we simultaneously make the capacity constraint flexible, impossibility will happen less and also the cost will decrease
  9. Keywords:
  10. Supply Chain ; Tabu Search Algorithm ; Dual Channel Supply Chain ; Location-Inventory Model ; Online Demand

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