Abstract
This study develops an integrated production-inventory model for a two-echelon supply chain network with controllable probabilistic deterioration. The investment in preservation technology is considered a decision variable to control the deteriorated quantity of an integrated system. The objective of the study is to optimize preservation investment, the number of shipments and shipment quantity, so that the total cost per unit of time of the supply chain is minimized. The study proposes a solution method, and the results show that investment in preservation technology reduces the total supply chain cost by 13%. Additionally, preservation increases the lot size, thus increasing the production cycle length, which reduces the ordering cost of the system. Furthermore, this study shows that preservation leads to a reduction of solid waste from deteriorated products. Total deteriorated products reduced to 8 units from 235 units, hence, preservation generates positive environmental benefits along with economic impacts. The robustness of the proposed model is illustrated with a numerical example, sensitivity analysis, and graphical representations. Moreover, comparative study and managerial insights are given to extract significant insights from the model.
Highlights
The phenomena of deterioration are referred to as spoilage, damage, vaporization or other changes in product quality or productivity because of environmental changes during storage
Our objective is to examine the trade-off between additional investment cost to control probabilistic deterioration and resulting total cost change in a two-echelon supply chain
The results further showed that preservation leads to an increase in the optimal lot size, which decreases the number of orders per year and ordering cost per year in a supply chain
Summary
The phenomena of deterioration are referred to as spoilage, damage, vaporization or other changes in product quality or productivity because of environmental changes during storage. Deterioration of products is a controllable factor which can be modified through investment in adequate preservation technology. Preservative technology contributes to the increased lifespan of materials by maximizing how efficiently they are processed. Preservation aids in lowering the amount of contamination generated in a commodity-to-product conversion or storage setup, and it reduces the required number of material supplies too. The decay of the cement matrix under certain environmental factors is decreased using pozzolanic additives, which reduces the calcium-leeching effect of cement substance in the environment [1]. Carbon emissions reduce up to 12%, and energy efficiency is enhanced by utilizing 19% less natural reserves with this additive
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