Vendor-managed inventory model for one vendor and two retailers with depedent demand | |
| Author | Hnin Oo Wei |
| Call Number | AIT Thesis no.ISE-24-21 |
| Subject(s) | Inventory control--Mathematical models Production management |
| Note | A thesis submitted in partial fulfillment of the requirements for the degree of Master of Engineering in Industrial and Manufacturing Engineering |
| Publisher | Asian Institute of Technology |
| Abstract | This thesis explores the development of a Vendor Managed Inventory (VMI) model for a supply chain comprising one vendor and two retailers with dependent demand, situated in the same geographical area. The primary objective is to maximize the vendor's profit by optimizing inventory management using a base stock inventory policy at a centralized warehouse. The study addresses the challenge of coordinating inventory management between the vendor and the retailers, considering the dependency in their demand patterns.The research begins with an extensive literature review on existing VMI models, highlighting the gaps in scenarios where retailers' demands are interdependent. A mathematical model is then developed, incorporating assumptions such as normally distributed demand, constant delivery lead time, and a base stock inventory policy at the centralized warehouse. The model calculates the total cost of the system, including holding, ordering, and shortage costs, to optimize inventory levels.Numerical experiments were conducted using MATLAB to validate the model. The results indicate that the optimal review period and base stock level significantly minimize the total cost of the VMI system. Sensitivity analyses were performed to examine the effects of various parameters, such as mean demand, standard deviation, ordering cost, lost sale cost, holding cost, safety factor, and lead time. The findings demonstrate that the model effectively adapts to changes in these parameters, ensuring cost efficiency and maintaining high service levels.This research provides valuable insights for supply chain stakeholders, enabling them to make informed decisions about inventory management under VMI systems. The proposed model's flexibility and practicality in real-world applications highlight its potential to enhance supply chain performance. |
| Year | 2024 |
| Type | Thesis |
| School | School of Engineering and Technology |
| Department | Department of Industrial Systems Engineering (DISE) |
| Academic Program/FoS | Industrial and Manufacturing Engineering (IME) |
| Chairperson(s) | Huynh, Trung Luong |
| Examination Committee(s) | Mongkol Ekpanyapong;Trau, Dieter Wilhelm |
| Scholarship Donor(s) | His Majesty the King’s Scholarships (Thailand) |
| Degree | Thesis (M. Eng.) - Asian Institute of Technology, 2024 |