Hybrid algorithm for a vendor managed inventory system in a two-echelon supply chain

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In this paper we address the issue of vendor managed inventory (VMI) by considering a two-echelon single vendor/multiple buyer supply chain network. We try to find the optimal sales quantity by maximizing profit, given as a nonlinear and non-convex objective function. For such complicated combinatorial optimization problems, exact algorithms and optimization commercial software such as LINGO are inefficient, especially on practical-size problems. In this paper we develop a hybrid genetic/simulated annealing algorithm to deal with this nonlinear problem. Our results demonstrate that the proposed hybrid algorithm outperforms previous methodologies and achieves more robust solutions.

Original languageEnglish (US)
Pages (from-to)114-121
Number of pages8
JournalEuropean Journal of Operational Research
Issue number1
StatePublished - Oct 1 2014


  • Genetic algorithms
  • Hybrid algorithms
  • Metaheuristics
  • Simulated annealing
  • Supply chain management

ASJC Scopus subject areas

  • General Computer Science
  • Modeling and Simulation
  • Management Science and Operations Research
  • Information Systems and Management


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