Algorithm for constructing a delivery-sequencing/inventory-allocation plan for supply chain control in the operational planning level

Abstract

This paper aims to propose an algorithm to construct a delivery-sequencing/inventory-allocation plan used to control a supply chain in the operational planning level. The algorithm which is mainly based on the improving search technique begins by determining a suitable initial sequence of customer orders, allocating available inventory and determining inventory replenishment plan according to the sequence, calculating the interesting goals, and finally searching the appropriate sequence of customer orders using a proposed pairwise interchange technique. The sequence of the customer order is considered appropriate if it can simultaneously give most preferable two goals: minimizing the total penalties paid by the supply chain, and minimizing the average cost of fulfilling each product unit transferred to customers. The efficiency of the proposed algorithm is tested by the numerical experiments based on real data from a selected supply chain in Thailand, namely the food-ingredient industry. Statistical results show that the proposed algorithm significantly outperforms the current planning heuristics used in the industry and some other well-known heuristics.

Keywords:

• Supply chain management
• Inventory allocation
• Delivery sequencing
• Operational planning level

Acknowledgement

This research was supported by The Royal Golden Jubilee PhD Program of Thailand Research Fund (Contract No. PHD/0056/2545).