Abstract

To analyze effects of supply chain coordination for deteriorating goods with stock-dependent demand rate, this paper presents decision models for order quantity and ordering cycle under two scenarios( decentralized supply chain, cen-tralized supply chain). Numerical study is carried out to demonstrate the effectiveness of the proposed models, and to analyze the impact of supply chain coordination on supply chain profit. Sensitivity analysis is performed to study the impact of different parameters associated with the model, such as the rate of deterioration, the retailer’s purchase cost, the manufacturer’s production cost, the retailer’s and manufacturer’s holding cost on the supply chain profit increase percentages generated by the supply chain coordination.

Highlights

  • In real life, many inventory goods, such as agricultural products, fashion goods, drugs and high-tech products, are subject to depletion through spoilage, shrinkage, decay and obsolescene [1]

  • Mandal and Phaujdar [16], Pal et al [17] developed the inventory models for deteriorating items with stock-dependent demand rate. We have extended these works, on deteriorating inventory research, by considering deteriorating goods with stock-dependent demand in a two-echelon supply chain consisting one manufacturer and one retailer, the objective is to investigate the effects of supply chain coordination on profit increase in the supply chain, and study the impact of different parameters associated with the model, such as the rate of deterioration, the retailer’s purchase cost, the manufacturer’s production cost, the retailer’s and manufacturer’s holding cost on the supply chain profit increase percentages generated by the supply chain coordination

  • (1) Whether the supply chain is centralized or decentralized, the optimal order quantity, the optimal replenishment cycle, the optimal supply chain profit are decreasing in the deterioration rate

Read more

Summary

Introduction

Many inventory goods, such as agricultural products, fashion goods, drugs and high-tech products, are subject to depletion through spoilage, shrinkage, decay and obsolescene [1]. Replenishment decision models under time-proportional demand and exponentially decaying deterioration rate was developed in [1]. Mandal and Phaujdar [16], Pal et al [17] developed the inventory models for deteriorating items with stock-dependent demand rate. We have extended these works, on deteriorating inventory research, by considering deteriorating goods with stock-dependent demand in a two-echelon supply chain consisting one manufacturer and one retailer, the objective is to investigate the effects of supply chain coordination on profit increase in the supply chain, and study the impact of different parameters associated with the model, such as the rate of deterioration, the retailer’s purchase cost, the manufacturer’s production cost, the retailer’s and manufacturer’s holding cost on the supply chain profit increase percentages generated by the supply chain coordination

Assumptions and Notations
The Decentralized Supply Chain
The Centralized Supply Chain
Numerical Study
Results of Optimization Procedure
Conclusions

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.