supply chain

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A supply chain (SC) is a network of organizations containing suppliers, manufacturers, distributors, wholesalers, and retailers. Each of these components plays its specific role in operations and production to supply needed products and required services to the end consumers. Each entity in this chain seeks its own benefits which can be obtained with or without collaboration with other chain entities. Depending on how decisions are made, there exist two major types of SCs. When each entity of SC only considers its own objectives and constraints, the SC is locally optimized and this is called a decentralized control mode. Nonetheless, when a single decision maker determines its decision policy with consideration of objectives and constraints of the entire entities in the SC, it is called a centralized control mode (Simchi-Levi et al. 1999). Achieved decision policy in the centralized mode may not be optimal for each entity; however, it is optimal for the whole SC. Furthermore, the centralized control mode can also be adopted under special configurations. For example, vendor-managed inventory (VMI) is a setting in which the centralized control mode should be used. The replenishment policy of each facility in the SC is mostly determined at the tactical stage for periods ahead and decision makers should decide upon when and how much to order and/or produce for each entity to provide their customers with a proper service level. In an uncertain environment, replenishment planning will be more complex where there is not sufficient information about the parameters related to other chain’s entities. Sometimes, these entities become involved in different kinds of contracts to coordinate with each other. It reduces risk in a stochastic situ... ... middle of paper ... ...imal solution. Then, a simulation method is developed to compare the centralized and decentralized SCs. In addition, to reach the near optimal solution in the centralized model, evolution strategy (ES) algorithm and imperialist competitive algorithm (ICA) as meta-heuristic approaches are applied. The remainder of this paper is organized as follows: In Section 2, a literature review on inventory systems in the area of SC is represented. Sections 3 and 4 are assigned to define the problem and also present the respective mathematical models. In Section 5, a scenario generation technique is described to deal with demand uncertainty in multiple periods. In Section 6, solution methods are developed to solve the centralized model. In Section 7, computational results of a numerical example are presented. Finally, Section 8 contains conclusions and future research directions.

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