Differential evolution algorithm for supply chain inventory planning

Abstract

PurposeThis paper discusses the inventory planning of a supply chain, which consists of a manufacturer, distributor and retailer.Design/methodology/approachThe differential evolution algorithm is developed to minimize the total system‐wide cost, which consists of supply chain inventory capital, supply chain ordering/set‐up cost and supply chain stock‐out cost.FindingsThe differential evolution algorithm helps in determining ordering/production quantity and inventory/service level that should be maintained by each member of the supply chain.Originality/valueThe algorithm developed is useful in increasing the customer service level and in decreasing the inventory level throughout the supply chain.