A generalized algebraic model for optimizing inventory decisions in a multi-stage complex supply chain

• Main Authors: Seliaman, M. E., Ahmad, Ab. Rahman
• Format: Article
• Published: Elsevier 2009
• Subjects: HD28 Management. Industrial Management
• Online Access: http://eprints.utm.my/id/eprint/11772/; http://dx.doi.org/10.1016/j.tre.2008.09.012
• Institution: Universiti Teknologi Malaysia

n this paper, we deal with more generalized inventory coordination mechanism in an n-stage, multi-customer, non-serial supply chain, where we extend and generalize pervious works that use algebraic methods to optimize this coordinated supply chain. We establish the recursive expressions for this multi-variable optimization problem. These expressions are used for the derivation of the optimal replenishment policy and the development of the solution algorithm. Further, we describe a simple procedure that can help in sharing the coordination cost benefits to induce all stages to adopt the inventory coordination mechanism. We provide a numerical example for illustrative purposes.