A simulation–optimization approach for a service-constrained multi-echelon distribution network

Marije Noordhoek, Wout Dullaert*, David S.W. Lai, Sander de Leeuw

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

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Abstract

Academic research on (s,S) inventory policies for multi-echelon distribution networks with deterministic lead times, backordering, and fill rate constraints is limited. Inspired by a real-life Dutch food retail case we develop a simulation-optimization approach to optimize (s,S) inventory policies in such a setting. We compare the performance of a Nested Bisection Search (NBS) and a novel Scatter Search (SS) metaheuristic using 1280 instances from literature and we derive managerial implications from a real-life case. Results show that the SS outperforms the NBS on solution quality. Additionally, supply chain costs can be saved by allowing lower fill rates at upstream echelons.

Original languageEnglish
Pages (from-to)292-311
Number of pages20
JournalTransportation Research. Part E, Logistics and Transportation Review
Volume114
DOIs
Publication statusPublished - Jun 2018

Keywords

  • Metaheuristics
  • Multi-echelon inventory
  • Scatter search
  • Service-constrained
  • Simulation-optimization
  • Supply chain performance

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