Design of a Two-tier Supply Chain Based on Integration, Pricing, Routing, and Inventory Control

Abstract

This paper integrates decisions about the three key components of the supply chain including pricing, routing and inventory control, and multi-product multi-cycle in a two-tier supply chain; includes a manufacturer and a collection of dedicated retailers. In addition to pricing, inventory management and distribution planning, production planning is also considered in the study. The goal is to maximize profits in the supply chain, where products are delivered to retailers by a fleet of limited-capacity identical vehicles under a multiple-delivery strategy. Also, limited production and storage capacity and unauthorized shortages are assumed. The proposed model will then be solved using CPLEX software package in GAMS environment and genetic algorithm in Matlab software to determine the optimal supply chain policy.