Design and optimization of dynamic reliability-driven order allocation and inventory management decision model

Abstract

Efficient order allocation and inventory management are essential for the success of supply chain operations in today’s dynamic and competitive business environment. This research introduces an innovative decision-making model incorporating dependability factors into redesigning and optimizing order allocation and inventory management systems. The proposed model aims to enhance the overall reliability of supply chain operations by integrating stochastic factors such as demand fluctuations, lead time uncertainty, and variable supplier performance. The system, named Dynamic Reliability-Driven Order Allocation and Inventory Management (DROAIM), combines stochastic models, reliability-based supplier evaluation, dynamic algorithms, and real-time analytics to create a robust and flexible framework for supply chain operations. It evaluates the dependability of suppliers, transportation networks, and internal procedures, offering a comprehensive approach to managing supply chain operations. A case study and simulations were conducted to assess the efficacy of the proposed approach. The findings demonstrate significant improvements in the overall reliability of supply chain operations, reduced stockout occurrences, and optimized inventory levels. Additionally, the model shows adaptability to various industry-specific challenges, making it a versatile tool for practitioners aiming to enhance their supply chain resilience. Ultimately, this research contributes to existing knowledge by providing a thorough decision-making framework incorporating dependability factors into order allocation and inventory management processes. Practitioners and experts can implement this framework to address uncertainties in their operations.