A hybrid vendor managed inventory and redundancy allocation optimization problem in supply chain management: An NSGA-II with tuned parameters

In this research, a bi-objective vendor managed inventory model in a supply chain with one vendor (producer) and several retailers is developed, in which determination of the optimal numbers of different machines that work in series to produce a single item is considered. While the demand rates of the retailers are deterministic and known, the constraints are the total budget, required storage space, vendor's total replenishment frequencies, and average inventory. In addition to production and holding costs of the vendor along with the ordering and holding costs of the retailers, the transportation cost of delivering the item to the retailers is also considered in the total chain cost. The aim is to find the order size, the replenishment frequency of the retailers, the optimal traveling tour from the vendor to retailers, and the number of machines so as the total chain cost is minimized while the system reliability of producing the item is maximized. Since the developed model of the problem is NP-hard, the multi-objective meta-heuristic optimization algorithm of non-dominated sorting genetic algorithm-II (NSGA-II) is proposed to solve the problem. Besides, since no benchmark is available in the literature to verify and validate the results obtained, a non-dominated ranking genetic algorithm (NRGA) is suggested to solve the problem as well. The parameters of both algorithms are first calibrated using the Taguchi approach. Then, the performances of the two algorithms are compared in terms of some multi-objective performance measures. Moreover, a local searcher, named simulated annealing (SA), is used to improve NSGA-II. For further validation, the Pareto fronts are compared to lower and upper bounds obtained using a genetic algorithm employed to solve two single-objective problems separately.