Design Model on Distribution Network of Vendor Managed Inventory

摘要

Inventory control of a distribution network is an important job for Vender Managed Inventory (VMI) system. Continuous approximation models have been used to describe inventory model, but not abundant in VMI. Only a handful of factors were considered in the delivery policies that are closely bound to inventory cost. This paper presents an integration of distribution network design, inventory control model and delivery model, which aims to take more factors into one design model, such as construction/operation cost, transportation cost, inventory cost, storage cost and ordering cost, delivery frequency and density of retailers etc. Based on Power Of Two (POT) policies, a continuous approximation model is proposed for distribution network in VMI. Finally the analysis and summary of this model is presented at the end of the paper.