Integrated Location-Inventory Retail Supply Chain Design: A Multi-objective Evolutionary Approach

Abstract

A supply chain network system is to provide an optimal platform for efficient and effective supply chain management. There's increasingly competitive, multi-channel retail world calls for a radically new strategy for evaluating supply chain network design. Retailers must abandon past practices which look to optimize the number and placement of facilities within traditional networks. A multi-objective optimization procedure which permits a trade-off evaluation for an integrated model is initially presented. This model includes elements of total cost, customer service and flexibility as its objectives and integrates facility location and inventory control decisions. Inventory control issues include economic order quantity, safety stock and inventory replenishment decisions and consider the risk pooling phenomenon to be realized from collaborative initiatives such as vendor-managed inventory. The possibility of a multi-objective evolutionary approach is developed to determine the optimal facility location portfolio and is implemented on a real large retail supply chain in Taiwan to investigate the model performance. Some preliminary results are described.