Replenishment policies for sustainable business development in a continuous credit based vendor managed inventory distribution system

In a credit supply environment in the fast moving consumer goods distribution in the developing countries, retailers are making the payment to the distributors in number of unequal installments. The distributors working with such retailers having different demand and payment policy have to accept delay of payment as a competitive strategy and achieve their own business objectives. Some distributors have the objective of minimizing the balance payment considering the financial safety. Some other distributors have the objective of maximizing the sales with an aim to go beyond business survival. In this paper two models are developed for the above two objectives and optimal replenishment policies are suggested. Genetic Algorithm and the linear programming are used together to solve the models. Two cases of biscuits and confectionery products distribution are taken for study and the results are compared with the existing system.