Abstract
Freight transportation plays a critical role in improving company performance in the modern manufacturing industry. To reduce costs, companies must take advantage of the use of large vehicles. It caused fewer deliveries, but inventory costs and degradation quality are high. One of the joint economic lot size (JELS) problems in supply chain is Integrated Single-Vendor Single-Buyer Inventory Problem (I-SVSB-IP). This study developed the I-SVSB-IP model that considers raw materials’ exponential quality degradation and transportation costs. The objective function of this research was to maximize the Joint Total Profit (JTP). Three decision variables used were inventory cycle time (T), raw material ordering frequency (m), and frequency of delivery of finished products to buyers (n). This study proposed a sophisticated Chimp Optimization Algorithm (ChOA) procedure to solve the I-SVSB-IP problem. A case study on the food industry in Indonesia was presented to optimize the I-SVSB-IP. The results showed that the ChOA procedure had produced an optimal solution compared to the state-of-the-art algorithm. This study also demonstrated a sensitivity analysis of decision and transportation variables to cost, revenue, and JTP. The results show that increasing transport frequency of ordering raw materials (m) and finished products to buyers (n) enhances the total cost and reduces joint total profit. In addition, increasing the rate of quality degradation of raw materials reduces JTP.
Highlights
Company performance is influenced by the effectiveness of supply chain management (SCM) [1,2,3]
Integrated inventory is proven to have the best performance in many companies [9, 10]. e freight transportation problem has a vital role in improving company performance [11]
In addition to transportation problems, the problem of decreasing quality is an important problem in inventory [17]. e decrease in the quality of raw materials impacts the quality of the finished product, which is not in accordance with company standards [18]
Summary
Company performance is influenced by the effectiveness of supply chain management (SCM) [1,2,3]. Some research studies assume that the degradation quality of raw materials is linear. In previous studies, research generally assumes that the demand for finished products is the same as the need for raw materials. The I-SVSB-IP study that discussed exponential quality degradation and transportation costs for food products was not investigated. Erefore, this study offers the I-SVSB-IP model by involving exponential quality degradation and transportation costs. Is study develops an exponential quality degradation raw material model from the research conducted by Fauza et al [34]. E decision variables of this study are inventory cycle time (T), frequency of raw material ordering (m), and frequency of delivery of finished products (n). (1) It offers a new I-SVSB-IP model involving exponential quality degradation and transportation costs.
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