A Research Of Integrated Inventory And Transportation Problem In Supply Chain Management

Inventory and transportation are two important aspects in supply chain management. Traditional studies always separate them to research. However, there is a very close relationship between inventory and transportation. Thus, it is very important to combine the two problems and make integrated research to improve the efficiency of the supply chain and reduce the cost.In this paper, a supply chain composed with one supplier and one retailer which has the dominated position in the supply chain has been studied first. Two models of Inventory and transportation problem of decentralized decision policy and combined decision policy are raised accordingly. The optimal strategy and the performance of each model are then been compared and discussed. Results of this study shows that in a supply chain in which the retailer has a dominated position, Using combined decision policy can reduce the total supply chain cost which include the inventory and transportation cost the using the decentralized decision policy. Therefore, supplier can provide some incentive to retailer to make them tend to choose the combined decision making policy.A supply chain composed with several suppliers and one demand point has been discussed in the next study. A joint inventory and transportation problem for multiple items under uncertain demand rate has been researched. A model aiming to optimize the total supply chain cost of this problem with periodic inventory replenishment policy has been built then. A heuristic method which decomposes the model into several inventory problems and transportation problems, each of which was solved with Genetic Algorithm has been design to solve this NP-hard problem. A lower bound is proposed to test the effectiveness of the heuristic method. The test results of several examples show that the model is reasonable and the heuristic method is feasible and effective to solve the problem.