Optimal Production-inventory Policy For An Integrated Multistage Supply Chain With Time Varying Demand

In modern society,with the development of economic globalization,market competition is becoming more and more fierce,the competition is not only between individuals in product quality,cost and so on,but also between supply chains.To reduce their own product costs and improve their competitiveness,supply chain managers need to be consumer-oriented,and to formulate production and operation strategies based on market demand,which include raw material procurement,manufacturing,inventory management and product distribution.Inventory management,as an important part of supply chain management,is not only the key to coordinating suppliers,producers and distributors,but also an important way to cutting operation costs and improving corporate profits.Efficient inventory management can not only prevent the uncertainty of market demand and ensure the stability of production or supply,but also reduce product cost and price,which improves competitiveness.This paper considers the inventory decision problem of the integrated multistage supply chain with time varying demand.The supply chain includes three stages:raw material procurement,production and distribution.Constructs a mixed integer nonlinear programming model for the problem.Determines the optimal ordering cycles of retailer and the optimal production strategy of manufacturer over a finite planning horizon to minimize the total operational cost.A network optimization method is used to obtain the manufacturer's optimal production strategy,a bound ant exhaustive method to find the retailer's optimal order cycle,and specific algorithms and programs of Matlab are given.Through numerical experiments and analysis,the results show that the methods are effective for most types of demand functions.By the experiments it is proved that the minimum cost function of supply chain is approximate to the convex function with respect to the order number of retailer.Studies the influence of various parameters on the optimal solution and the minimum cost,explores the relationship between the various parties in the supply chain,and draw some conclusions which are of great value to the supply chain managers in devising the production order policy to minimize the operation cost.