The inventory deployment decision in the retail supply chain, by S.C. Geerts (with Jumbo Supermarkten)
July 3, 2017
The master thesis project deals with the development of a quantitative ILP-model in order to solve the so-called inventory deployment decision for ambient products in a retail supply chain with central and regional distribution centers (DC) with internal consolidation. The inventory deployment decision is the problem at which distribution stage and in which storage pick type products should be stored. The model includes handling, inter-DC, and inbound transportation costs and allocates each product to the optimal distribution stage and storage pick type, such that overall costs are lowest, while taking into account capacity and service constraints. Results show that the most important product characteristic in the inventory deployment decision is the volume sold per week. In addition, the optimal allocation of products to DCs is also for a big part determined by the potential volume delivered by the supplier to a DC, as economies of scale could be realized when a supplier is allocated to only one distribution stage. It can be concluded that deciding both on the product- and supplier-level is beneficial.