The model proposed here is based upon the following assumptions:
• Customer demands are known and fixed during each period
• Supplier is the leader and retailers are the followers. This means
that supplier makes decision about the quantities and the timing
of replenishment and determines the types and the amounts of
products to be delivered to the retailers by the vehicles
• The number of each type of vehicle is enough to handle all
delivery replenishments
• A vehicle can visit some retailers in a single trip
• Transportation cost consists of a fixed vehicle cost and a
fixed retailer-dependent handling cost. A fixed vehicle cost is
incurred when a vehicle used for delivery and a fixed retailerdependent
material handling is incurred when a vehicle arrives
in a retailer warehouse
• All kind of products have the same cubical space, and all the
vehicles have equal capacity