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2021 | OriginalPaper | Chapter

1. A Dynamic Lot Sizing Model Under Vendor Managed Inventory (VMI)

Authors : Farshid Evazabadian, Regina Berretta, Mojtaba Heydar

Published in: Data and Decision Sciences in Action 2

Publisher: Springer International Publishing

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Abstract

This paper explores the impact of Vendor managed inventory (VMI) on a decentralized supply chain by proposing two Mixed-integer linear programming (MILP) models for a dynamic lot sizing problem. The models describe the decision-making for lot sizing before and after the implementation of VMI. The proposed models highlight that VMI takes advantage of centralized decision-making, and can reduce the cost of the lot sizing by better synchronization of the decisions. Numerical results, provided to compare the efficiency of VMI with the traditional decentralized lot sizing, indicate significant cost reduction under VMI. A set of experiments is also designed to determine the impact on retailers’ cost (ordering and holding) as well as vendors cost (setup and holding) on the gap.

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Metadata
Title
A Dynamic Lot Sizing Model Under Vendor Managed Inventory (VMI)
Authors
Farshid Evazabadian
Regina Berretta
Mojtaba Heydar
Copyright Year
2021
DOI
https://doi.org/10.1007/978-3-030-60135-5_1