Inventory planning for a multi-echelon supply chain

Abstract

Inventory planning is the significant operational issue in supply chain management. In this paper, a mathematical model is developed for multi-echelon supply chain inventory planning to determine ordering/production quantity and reorder point while minimising the Total Supply Chain Cost (TSCC) (i.e., supply chain inventory capital, supply chain ordering/set-up cost and supply chain inventory stock out cost). Differential Evolution algorithm is used for multi-echelon supply chain inventory planning. One case situation is elucidated in order to reinforce the salient features of the concept. A sensitivity analysis is also carried out to show the effect of input parameters on the TSCC.