A single-consignor multi-consignee multi-item model with permissible payment delay, delayed shipment and variable lead time under consignment stock policy

B Karthick,R Uthayakumar

doi:10.1051/ro/2021113

Abstract

This article proposes a two-level fuzzy supply chain inventory model, in which a single consignor delivers multiple items to the multiple consignees with the consignment stock agreement. The lead time is incorporated into the model and is considered a variable for obtaining optimal replenishment decisions. In addition, crashing cost is employed to reduce the lead time duration. This article investigates four different cases under controllable lead time to analyze the best strategy, focusing on two delays such as delay-in-payments and delay-in-shipment. In all four cases, all associated inventory costs are treated as a trapezoidal fuzzy number, and a signed distance method is employed to defuzzify the fuzzy inventory cost. An efficient optimization technique is adopted to find the optimal solution for the supply chain. Four numerical experiments are conducted to illustrate the four cases. Any one of these experimental results will provide the best solution for the ideal performance of the business under controllable lead time in the consignment stock policy. Finally, the managerial insights, conclusion and future direction of this model are provided.

Highlights

IntroductionThe consignment stock plays a vital role to attain a higher profit
In the supply chain, the consignment stock plays a vital role to attain a higher profit
By combining all of the features as mentioned above, in this study, we have considered four different cases under controllable lead-time (CLT) in an uncertain environment, namely (i) Consignment stock (CS) policy with no delay in payment (NDIP) – no delay in the shipment (NDIS) under CLT, (ii) CS policy with delay in payment (DIP) – no delay in the shipment (NDIS) under CLT, (iii) CS policy with no delay in payment (NDIP) – delay in the shipment (DIS) under CLT, (iv) CS policy with delay in payment (DIP) – delay in the shipment (DIS) under CLT

Summary

Introduction

The consignment stock plays a vital role to attain a higher profit. The consignee pays for those products only when it sold. Inventory management is a crucial part of the consignment partnership process. This partnership has attracted many researchers’ attention, and, as a result, numerous inventory models have been studied under the CS contract. The number of new products increases day by day depending on the customers’ needs. To attract new customers, many researchers have incorporated permissible payment delay to their models, saying that such incorporation will enable greater profitability under the integrated supply chain

Methods

Discussion

Conclusion