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Abstract
Purpose: The purpose of this paper is to propose a heuristic for the inventory management of smart vending machine systems with product substitution under the replenishment point, order-up-to level policy and to evaluate its performance. Design/methodology/approach: The heuristic is developed on the basis of the decoupled approach. An integer linear mathematical model is built to determine the number of product storage compartments and replenishment threshold for each smart vending machine in the system and the Clarke and Wright’s savings algorithm is applied to route vehicles for inventory replenishments of smart vending machines that share the same delivery days. Computational experiments are conducted on several small-size test problems to compare the proposed heuristic with the integrated optimization mathematical model with respect to system profit. Furthermore, a sensitivity analysis is carried out on a medium-size test problem to evaluate the effect of the customer service level on system profit using a computer simulation. Findings: The results show that the proposed heuristic yielded pretty good solutions with 5.7% error rate on average compared to the optimal solutions. The proposed heuristic took about 3 CPU minutes on average in the test problems being consisted of 10 five-product smart vending machines. It was confirmed that the system profit is significantly affected by the customer service level.
Highlights
Smart vending machines that enable sales and inventory information to be remotely monitored through the Internet using embedded online messaging devices were recently introduced. Webster et al (1999) developed an experimental Java client-server system with a special purpose hardware interface to control a Pepsi vending machine via the Internet
We evaluated the performance of the proposed heuristic by comparing it with the integrated optimization mathematical model
We proposed a heuristic for the inventory management of smart vending machine systems with product substitution under the replenishment point, order-up-to level policy
Summary
Smart vending machines that enable sales and inventory information to be remotely monitored through the Internet using embedded online messaging devices were recently introduced. Webster et al (1999) developed an experimental Java client-server system with a special purpose hardware interface to control a Pepsi vending machine via the Internet. Webster et al (1999) developed an experimental Java client-server system with a special purpose hardware interface to control a Pepsi vending machine via the Internet. Jofemar unveiled what it claims is the world’s first autonomous hydrogen-powered smart vending machine at the 2009 National Vending Machine Exposition (Fuel Cells Bulletin, 2009). Smart vending machines are expected to resolve the problems inherent to conventional vending machines such as run-out of products and machine breakdowns left for a long time. Wolson (2000) insisted that smart vending machines are the future of the vending machine industry Smart vending machines are expected to resolve the problems inherent to conventional vending machines such as run-out of products and machine breakdowns left for a long time. Wolson (2000) insisted that smart vending machines are the future of the vending machine industry
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