Coordinated control of distribution supply chains in the presence of fuzzy customer demand

Dobrila Petrovic, Y. Xie, Keith Burnham, R. Petrovic

    Research output: Contribution to journalArticle

    53 Citations (Scopus)
    69 Downloads (Pure)

    Abstract

    This paper considers a single product inventory control in a Distribution Supply Chain (DSC). The DSC operates in the presence of uncertainty in customer demands. The demands are described by imprecise linguistic expressions that are modelled by discrete fuzzy sets. Inventories at each facility within the DSC are replenished by applying periodic review policies with optimal order up-to-quantities. Fuzzy customer demands imply fuzziness in inventory positions at the end of review intervals and in incurred relevant costs per unit time interval. The determination of the minimum of defuzzified total cost of the DSC is a complex problem which is solved by applying decomposition; the original problem is decomposed into a number of simpler independent optimisation subproblems, where each retailer and the warehouse determine their optimum periodic reviews and order up-to-quantities. An iterative coordination mechanism is proposed for changing the review periods and order up-to-quantities for each retailer and the warehouse in such a way that all parties within the DSC are satisfied with respect to total incurred costs per unit time interval. Coordination is performed by introducing fuzzy constraints on review periods and fuzzy tolerances on retailers and warehouse costs in local optimisation subproblems.
    Original languageEnglish
    Pages (from-to)146-158
    JournalEuropean Journal of Operational Research
    Volume185
    Issue number1
    DOIs
    Publication statusPublished - Feb 2008

    Keywords

    • fuzzy sets
    • fuzzy two-level optimisation
    • distribution supply chain
    • inventory control
    • uncertainty

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