Abstract
We study a two-echelon supply chain inventory model with controllable lead time and service level constraint in fashion supply chains, in which we assume that the unit cost of compressing lead time follows exponential distribution. Under these conditions we investigate the optimal ordering quantity and production quantity in the fashion supply chain by minimizing the joint total cost. Simultaneously, we work out the boundaries of ordering quantity and production quantity, which simplify the computation. Furthermore, numerical examples are presented to test the feasibility of the model. The results show that assuming the unit cost of compressing lead time in accordance with exponential distribution is realistic. It also notices that the optimal order and production decision for fashion supply chains are constrained obviously by the service level and safety factors. What is more, the holding cost rate of both the service level and safety factors has a certain influence on it. And by further analyzing on some references in the last part, we have done some extensions and found some interesting results.
Highlights
The fashion industry has some specific features like short product life cycle, volatile, unpredictable demand, and tremendous product variety
This paper mainly studies the ordering, production quantity in the fashion supply chain with service level constraint and controllable lead time
In order to look for the optimal order quantity, optimal production quantity, and optimal lead time with service level constraint, we establish a model for the total expected cost of the inventory system and minimize it to attain the optimal value of the decisive variables
Summary
The fashion industry has some specific features like short product life cycle, volatile, unpredictable demand, and tremendous product variety. We add to these growing efforts of optimizing fashion supply chains by analyzing the order and production decisions under service level constraint and controllable lead time. To the best of our knowledge, the issue of fashion supply chains’ optimal decision under service level constraint and controllable lead time, with the assumption that the cost of compressing lead time is to be exponentially distributed, has never been adequately investigated. The optimal backorder decision and lost sales problem have a close bearing with the service level constraint and controllable lead time [6]. It is of great significance to study the order and production decisions of the fashion supply chain with service level constraint and controllable lead time. This paper mainly studies the ordering, production quantity in the fashion supply chain with service level constraint and controllable lead time. Conclusions and suggestions are made for further researches in the last section
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