An integrated inventory and order pick-up model considering the vendor's capacities and the vehicle trips' duration for the MVSB system

Abstract

Purpose: This research develops a model integrating inventory with order pick-up that considers both the vendor’s capacities and the pick-up time for the multi-vendor single-buyer (MVSB) system. Design/methodology/approach: A model of integrating inventory with pick-up of order considering both the vendor’s capacities and the pick-up time for the MVSB’s system is formulated as a mixed integer non-linear programming, and a heuristic-metaheuristic algorithm is proposed to solve the problem. This model applies a decomposition approach to minimize total relevant costs, which consist of the buyer’s ordering, vendor’s set-up, vendor’s and buyer’s holding, and pick-up. Findings: This research proposes an inventory model integrated with the pick-up of orders, considering both the capacity of the vendor and the pick-up time for the MVSB system. This research also proposes a hybrid heuristic-metaheuristic algorithm that can obtain a solution in realistic computational time. Originality/value: This paper proposes a mathematical model for the inbound inventory routing problem, considering both the capacities of vendors and the pick-up time for the MVSB system.

Keywords

• jit procurement, inventory, vendor’s capacity, lot-size, vehicle, milk-run