Integrated sourcing and inventory decisions considering sources’ disruptions with a hybrid simulation-MOPSO-TOPSIS approach: A pharmaceutical case study

Abstract

In this research, the integrated sourcing and inventory policy problem in a pharmaceutical distribution company is investigated. In order to select the superior solution, a new tool is introduced. Sourcing is one of the most critical issues in pharmaceutical industry. In addition, drug inventory shortages can cause irreparable humanitarian crises. However, only a limited number of studies has been focused on integrated sourcing and inventory policy of drugs so far. In real-world problems, it is difficult to calculate the exact cost of inventory shortage such as company reputation and humanitarian crises. To overcome this obstacle, in this study, the number of shortage is considered as a separate objective. Likewise, demands of the distributors and breakdowns of suppliers are stochastic, and due to the complicated nature of the problem is difficult to calculate the objective function by using classic methods. So, simulation is used for estimating the objectives of the problem. It’s been proved that the problem of this study is NP-Hard. Therefore, a metaheuristic multi-objective particle swarm optimization (MOPSO) method is used to find the optimal solution. To test the reliability of the model and the proposed algorithm, a real drug distributing problem is used and after estimating a Pareto front, the best answer is chosen by The Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) method.