Sustainable Distribution and Inventory Planning in Supply Chains under VMI Strategy for B2B and B2C Models Using IoT

Document Type : Research Paper

Authors

1 Department of Industrial Engineering, Faculty of Engineering, Alzahra University, Tehran, Iran

2 Department of Industrial Engineering, Faculty of Engineering, Kharazmi University, Tehran, Iran

Abstract

–This study explores optimizing sustainable supply chains by integrating vendor-managed inventory (VMI) and internet of things (IoT). The research focuses on business-to-business (B2B) and business-to-customer (B2C) models. While VMI is widely studied in B2B, its B2C application remains limited. This study examines the tire manufacturing sector, addressing significant environmental and safety concerns. A multi-level optimization framework is introduced to minimize costs, reduce carbon emissions and waste, and enhance customer safety. Customer safety is introduced as a novel social factor. The density-based spatial clustering of applications with noise (DBSCAN) algorithm clusters retailers, improving efficiency and reducing computational time. The framework serves very important customers under the VMI strategy, while normal customers are excluded. Empirical data from a tire manufacturer validates the framework using the Gurobi optimization package. The results demonstrate that applying VMI to all customers significantly increases service levels and the objective function value. Conversely, restricting VMI to B2B customers alone leads to a decline in both service levels and the objective function. Results confirm the scalability and efficiency of the model, with sensitivity analysis showing strong performance under varying parameters. This paper explores VMI in B2B and B2C models, offering insights into sustainable supply chain management.
 

Keywords

References

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Journal of Quality Engineering and Production Optimization
Volume 9, Issue 2
December 2024
Pages 85-106

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