Cost optimization of supply chain network of departmental store

Abstract

Supply chain is a network of many entities, some of which are suppliers, manufacturers, wholesalers and retailers, through which raw materials are acquired, transformed, produced and delivered to the end-customer. An effective and efficient way of managing this network is called as Supply Chain Management. In this paper, a multi-objective algorithm is used to solve a three stage supply chain problem. The three stage supply chain or three entities considered are suppliers, wholesalers and a retailer. Typically all supply chain problems are characterized by conflicting objectives of each entity. This work specifically deals with the implementation of an algorithm which makes a trade-off between these conflicting objectives and enables any retailer to obtain the most optimal solution (supply chain) using the concept of pareto-optimality. It considers three major objectives- transportation cost, cost of product and the capacity of the wholesaler. Thus the optimization obtained will be reflected in the entire chain and will not be biased to any one entity in particular.