Main Article Content
We consider an inventory/distribution system consisting of one warehouse and N retailers (OWNR). Warehouse replenishes its orders from external supplier and supplies all orders of retailers. The objective of this paper is to maximise supply chain benefits of the whole system. To achieve this objective SENYIGIT and AKKAN’s heuristic algorithm is used. We assume that demand is constant and deterministic; shortages are not allowed and lead times are negligible. Total system cost consists of order-quantity-dependent replenishment and inventory holding cost parameters, and quantity discounts are applicable. The main idea of new heuristic is to compare replenishment and inventory holding costs while manipulating the order quantity by order intervals of locations. While balance condition is searched by new version of SENYIGIT and AKKAN’s heuristic algorithm, quantity discounts and replenishment costs will reduce costs of whole systems. Capital limit constraint is also included to the model of objective function. The algorithm is developed for quantity discounts and 100 datasets randomly generated for the system that contains five retailers and the solutions were obtained by developed heuristic.
Keywords: Supply chain management, two echelon inventory systems, integer-ratio policies, quantity discounts, heuristic method, variable cost parameters.
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).