Multi objective coordination of a supply chain with routing and service level consideration

In recent years, there has been considerable research on supply chain coordination in the single objective framework. However, to the best of our knowledge, the multi objective coordination has not yet been considered in the literature. The supply chain studied in this paper, includes one vendor (central depot) and arbitrary number of buyers. The vendor distributes goods to buyers who face the Newsvendor problem with stochastic demand. The aim of the problem is to specify ordering and routing decisions by making trade-off among three objectives. Due to the complexity of the problem, the Harmony Search (HS) algorithm is proposed. Finally, coordinating the supply chain by means of a revenue sharing contract is considered with the goal of optimizing three objectives. The revenue sharing contract is designed such that the decision variables in the coordinated policy coincide with those of the centralized setting. A numerical study has been carried out to explain the efficacy of the model along with the trade-off among the multiple objectives.