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“Minimization of Inventory & Transportation Cost Of an Industry”-A Supply Chain Optimization

Author(s): Nonihal Singh Dhakry

Journal: International Journal of Engineering Research and Applications
ISSN 2248-9622

Volume: 3;
Issue: 5;
Start page: 96;
Date: 2013;
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Keywords: Supply chain | Preliminary Distribution model | Cross-Dock and Direct Shipment Models Lagrangian Method

In this paper a study on three in-stock strategies – flow-through, regional and single DC central stock and developed a simple transportation-inventory model in order to compare their total costs is done. We have also described a distribution model proposed by in which the model is formulated as a non-linear integer optimization problem. Due to the non-linearity of the inventory cost in the objective function, two heuristics and an exact algorithm is proposed in order to solve the problem. The results obtained from the transportation-inventory models show that the single DC and regional central stock strategies are more cost-efficient respectively compared to the flow-through approach. It is recommended to take the single DC and the regional central stock strategies for slow moving and emanding products respectively: Minimizing inventory & transportation cost of an industry: a supply chain optimization
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