Application of the Vendor Managed Inventory (VMI) Model Based on Total Distribution Cost Optimization

Alberto, Giovano; Alexander Jimmy

Open access Journal

Application of the Vendor Managed Inventory (VMI) Model Based on Total Distribution Cost Optimization

Maritime Park: Journal of Maritime Technology and Society · Vol. ume (2026) · pp. 252–258

ISSN: 2828-6669, 2828-7010
Published: 2026-06-21
Publisher: Department of Ocean Engineering, Faculty of Engineering, Hasanuddin University
Language: en
License: creativecommons.org/licenses/by/4.0

Abstract

This study develops an optimization-based Vendor-Managed Inventory (VMI) model to improve coordination between inventory and transportation decisions in an upstream automotive distribution network in West Java. The problem is formulated as a multi-period Inventory Routing Problem (IRP) and solved using AMPL with CPLEX. The model minimizes total logistics cost, including transportation and inventory holding costs. A benchmark comparison with the company’s existing decentralized replenishment policy is conducted. Results show that the proposed VMI model reduces total monthly logistics cost by 10.66%, from IDR 2.74 billion to IDR 2.44 billion. In addition, service performance improves significantly, with demand fulfilment increasing from 91.3% to 99.2% and stock-out occurrences eliminated. The findings highlight the importance of integrated decision-making in freight distribution systems and provide practical insights for transport capacity planning and inventory positioning.

Keywords

Collaboration network of the authors

5 authors · 7 co-authorship links · 3 across different organisations

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Parahyangan Catholic University
Bandung Institute of Technology
Affiliation unknown

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Same organisation
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Co-author	Organisation	Joint articles
Titi Iswari	Parahyangan Catholic University	1
Jansen Prayoga	Parahyangan Catholic University	1
Hilton Tnunay	Bandung Institute of Technology	1

Affiliations come from OpenAlex; journal OAI-PMH metadata carries none. Authors without an OpenAlex ID are matched by name, which can merge or split people.

Metadata source: OAI-PMH (metadata jurnal) https://journal.unhas.ac.id/index.php/maritimepark/oai, first harvested 2 Nov 2026, last seen 2 Nov 2026.

Original metadata (oai_dc)

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	<dc:title xml:lang="en">Application of the Vendor Managed Inventory (VMI) Model Based on Total Distribution Cost Optimization</dc:title>
	<dc:creator xml:lang="en">Alberto, Giovano</dc:creator>
	<dc:creator xml:lang="en">Alexander Jimmy</dc:creator>
	<dc:subject xml:lang="en">Route Optimization</dc:subject>
	<dc:subject xml:lang="en">Vendor-Managed Inventory</dc:subject>
	<dc:subject xml:lang="en">Automotive Distribution</dc:subject>
	<dc:subject xml:lang="en">Inventory Routing Problem</dc:subject>
	<dc:description xml:lang="en">This study develops an optimization-based Vendor-Managed Inventory (VMI) model to improve coordination between inventory and transportation decisions in an upstream automotive distribution network in West Java. The problem is formulated as a multi-period Inventory Routing Problem (IRP) and solved using AMPL with CPLEX. The model minimizes total logistics cost, including transportation and inventory holding costs. A benchmark comparison with the company’s existing decentralized replenishment policy is conducted. Results show that the proposed VMI model reduces total monthly logistics cost by 10.66%, from IDR 2.74 billion to IDR 2.44 billion. In addition, service performance improves significantly, with demand fulfilment increasing from 91.3% to 99.2% and stock-out occurrences eliminated. The findings highlight the importance of integrated decision-making in freight distribution systems and provide practical insights for transport capacity planning and inventory positioning.</dc:description>
	<dc:publisher xml:lang="en">Department of Ocean Engineering, Faculty of Engineering, Hasanuddin University</dc:publisher>
	<dc:date>2026-06-21</dc:date>
	<dc:type>info:eu-repo/semantics/article</dc:type>
	<dc:type>info:eu-repo/semantics/publishedVersion</dc:type>
	<dc:format>application/pdf</dc:format>
	<dc:identifier>https://journal.unhas.ac.id/index.php/maritimepark/article/view/49829</dc:identifier>
	<dc:source xml:lang="en">Maritime Park: Journal of Maritime Technology and Society; Volume 5, Issue 2, 2026;  252-258</dc:source>
	<dc:source>2828-6669</dc:source>
	<dc:source>2828-7010</dc:source>
	<dc:language>en</dc:language>
	<dc:relation>https://journal.unhas.ac.id/index.php/maritimepark/article/view/49829/14585</dc:relation>
	<dc:rights xml:lang="en">Copyright (c) 2026 Maritime Park: Journal of Maritime Technology and Society</dc:rights>
	<dc:rights xml:lang="en">https://creativecommons.org/licenses/by/4.0</dc:rights>
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