Optimization of Supply Chain Networks Using MINLP Model with Deterministic Demand

Abstract

This paper aims at investigating the optimization of supply chain networks (SCN) for industrial plants under vendor managed inventory (VMI) policy. The vendor uses Long Range Wide Area Network (LoRaWAN) to minimize the total cost of networks. The problem was developed as a mixed-integer non-linear program (MINLP) model, which helped in reducing the total cost of a VMI, to formulate the coordinated decision issue that incorporates the location inventory issue with the allocation task of LoRaWAN technology and its level of investment. We performed different strategies of investment of LoRaWAN technology of having objective function with three different scenarios: 1) Investment of LoRaWAN technology only in ordering operations; 2) Investment of LoRaWAN technology only in holding operations; 3) Investment of LoRaWAN technology in both holding and ordering operations. The simulation results indicated that the cost-saving obtained by the third scenario is significant due to the least total cost of the objective function as compared with the total cost of the objective function obtained by the first and second scenarios.