Supply Chain Purchasing Domain Optimization in a Portuguese Retail Company

Abstract

In this paper we address a case study of the purchasing management section in a Portuguese company in the Retail sector. The purchasing management costs in this company were found to depend largely on the storage mode of the products. Therefore we developed a mathematical model for optimizing the purchasing management costs. In the model we address how to order the products and which storage mode to choose, in order to minimize costs and fulfil the demand. Real instances regarding the monthly demand for one year are tested and the results show that the model can reduce the ratio between operational costs and merchandise costs in almost every instance.