# INVENTORY-MANAGEMENT-PROJECT 2 .docx - Course: Inventory...

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Course: Inventory ManagementInstructor: Nguyen Van Hop
Course: Inventory ManagementInstructor: Nguyen Van HopI.Manage & plan route for blood product supply under uncentainty usage case1.System DescriptionThe aim of the porject is to plan delivery routes of blood products to hospital in Eastern AustriabyAustrian Red Cross (ARC). Since the blood product demands are uncentainty & fluctuate dueto emergency cases, stochastics model is proposed and replaced the initial deterministic modelwhich caused the product shortfall problem.The solution is using external sampling to convert The two-stage stochastic optimizationproblem, which is integrated by an Integer Programming approach and a Variable NeighborhoodSearch (VNS) approach, into a deterministic optimization problem.The system goal is to build up a 2-week period supply plan that ensures the availability ofvehicles, optimization of quantity per trip, number of trip, fixed cost, variable cost and errorbetween expecting and realistic number of emergency trip.In this report, we will show asystematical application of theVMI (vendor managed inventory)for a supply chain with stochastic demand. By adopting vendor managed inventory, theorganizations involved can be gained through cost reduction based on numerical analysis andLingo optimization software. ealistic number of emergency trip.2.Problem Statement2.1Perishable goods problemsSince blood is a perishable good, the inventory of blood products has to be managed carefully toavoid spoilage. Therefore, the blood bank has to regularly supply a set of hospitals with certainproducts at different rates.Any delivery policy should be such that no shortfall of productsoccurs at the hospitals, but at the same time spoilage of products is kept at a minimum.2.2 Blood product shortfall due to deterministic forcase problemThe initial attempt is to use deterministic blood product usage by that forecast demands based onprevious data of recent weeks or months, then build up at a constant rate to meet acceptablerange of predicted known demands ( mainly appointed surgeries). However, lack of breath viewin the long run, ARC has faced the blood shortage under emergency case at hospitals. In the
Course: Inventory ManagementInstructor: Nguyen Van Hopreality, demands are supposed to be a random variable on a bounded interval due to unexpectedcase; therefore, it is unfeasible to create a cost-savings 2-week period plan to adapt accuratelyblood product without underage supply. In short, the problem is modeled as a nonlinear integerprogram and methods for the deterministic vehicle routing problem are extended to handle therandom demand.The improved proposed model is to used stochastic demand, and two solution approaches areintroduced:Integer Programming approachVariable Neighborhood Search (VNS) approach2.3 Stochastic variants of inventory routing problemsOptimize cost problemWhen usage is stochastic (a random variable supported on a bounded interval), the demand is

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Term
Spring
Professor
Dung
Tags
Nguyen Van Hop