Simulation-based evolution of resupply and routing policies in rich vendor-managed inventory scenarios
S. Vonolfen, M. Affenzeller, A. Beham, E. Lengauer, S. Wagner - Simulation-based evolution of resupply and routing policies in rich vendor-managed inventory scenarios - Central European Journal of Operations Research, Vol. 21, No. 2, 2013, pp. 379-400
Vendor managed inventory combines inventory management and transportation.
Compared to classical inventory management approaches, this strategy
offers various degrees of freedom for the vendor while providing a certain service
quality level for the customers. To capture the characteristics of rich real-world scenarios,
our problem formulation consists of multiple customers, many products and
stochastic product usages. Additionally, we also consider mixed formulations, where
only a certain part of the customers is switched to a vendor managed inventory to allow
a stepwise transition. We show that resupply and routing policies can be evolved
autonomously for those scenarios using a simulation-based optimization approach.
By combining inventory management and routing, the resulting policies aim to minimize
costs and to maximize resource usage while maintaining a given service level.
In order to validate our approach, we perform case studies and apply the evolved rules
on a large-scale vendor managed inventory scenario for supermarkets. Furthermore,
we show that our methodology can be used to perform a sensitivity analysis by considering
the influence of exogenous and endogenous factors on the decision process,
if a customer base should be transitioned to a vendor managed inventory.