Determining the Replenishment Policy and Supplier Selection in Integrated Supply Chain for Deteriorating Products

Supplier selection and determining appropriate replenishment policies is one of the major concerns in production systems and supply chains. This paper describes the supply chain of integrated buyers and suppliers of perishable product. The retailer supplies the product it needs from different manufacturers. Products purchased by manufacturers are perishable products, and their Perishable rate is expressed as a fixed percentage of retailers' and manufacturers' inventories. In this situation, the selection of suppliers and the determination of the quantity to purchase from each supplier have a great impact on the optimization of the supply chain. Based on the fixed demand of the end customers, the retailer tries to determine its optimal replenishment policy, and based on this optimal policy, the process of purchasing raw materials from manufacturers, as well as the time and amount of purchase from each manufacturer will be determined. Among these, the supplier that can deliver the product within the specified time and at the lowest cost will be selected. The main purpose of this paper is to select suppliers and determine replenishment policies in a way that minimizes the total cost of this chain of supply, including retailer and supplier costs. This model uses a mixed-integer linear programming approach. Finally, this model was checked with a numerical example.