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An integrated production inventory model with raw material replenishment considerations in a three layer supply chain

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  • Ben-Daya, Mohammed
  • As’ad, Rami
  • Seliaman, Mohammed

Abstract

Most of the existing research has focused on a two stage single-vendor single-buyer supply chain. However, in reality, supply chain networks are more complex and involve more than just a vendor and a buyer. This paper deals with the joint economic lot sizing problem (JELP) in the context of a three stage supply chain consisting of a single supplier, single manufacturer and multi-retailers. The objective is to specify the timings and quantities of inbound and outbound logistics for all parties involved such that the chain-wide total ordering, setup, raw material and finished product inventory holding costs are minimized. In developing the model, the cycle time at each stage is set to be an integer multiple of that for the adjacent downstream stage. To bear a better resemblance to practice, shipments from a particular lot are allowed to take place during production and not after producing the whole lot. We employ derivative-free methods to derive a near closed form solution for the developed model. A numerical example is presented for illustrative purposes and a comparison to models established in the literature is also provided.

Suggested Citation

  • Ben-Daya, Mohammed & As’ad, Rami & Seliaman, Mohammed, 2013. "An integrated production inventory model with raw material replenishment considerations in a three layer supply chain," International Journal of Production Economics, Elsevier, vol. 143(1), pages 53-61.
    • Handle: RePEc:eee:proeco:v:143:y:2013:i:1:p:53-61
    DOI: 10.1016/j.ijpe.2010.10.024
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    9. Muhammad Waqas Iqbal & Muhammad Babar Ramzan & Asif Iqbal Malik, 2022. "Food Preservation within Multi-Echelon Supply Chain Considering Single Setup and Multi-Deliveries of Unequal Lot Size," Sustainability, MDPI, vol. 14(11), pages 1-30, June.
    10. S. M. Shahidul Islam & Mohammad Abdul Hoque, 2017. "A joint economic lot size model for a supplier-manufacturer-retailers supply chain of an agricultural product," OPSEARCH, Springer;Operational Research Society of India, vol. 54(4), pages 868-885, December.
    11. Sarkar, Biswajit & Ganguly, Baishakhi & Sarkar, Mitali & Pareek, Sarla, 2016. "Effect of variable transportation and carbon emission in a three-echelon supply chain model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 91(C), pages 112-128.
    12. Islam, S.M. Shahidul & Hoque, Md. Abdul & Hamzah, Norhayati, 2017. "Single-supplier single-manufacturer multi-retailer consignment policy for retailers’ generalized demand distributions," International Journal of Production Economics, Elsevier, vol. 184(C), pages 157-167.
    13. Ik Sun Lee, 2016. "Production and shipment policy under dynamic demand in the supply chain environments," International Journal of Applied Management Science, Inderscience Enterprises Ltd, vol. 8(1), pages 1-19.
    14. Ravi Shankar Kumar & M. K. Tiwari & A. Goswami, 2016. "Two-echelon fuzzy stochastic supply chain for the manufacturer–buyer integrated production–inventory system," Journal of Intelligent Manufacturing, Springer, vol. 27(4), pages 875-888, August.
    15. Ata Allah Taleizadeh & Mahsa Noori-daryan, 2016. "Pricing, inventory and production policies in a supply chain of pharmacological products with rework process: a game theoretic approach," Operational Research, Springer, vol. 16(1), pages 89-115, April.
    16. Cárdenas-Barrón, Leopoldo Eduardo & Sana, Shib Sankar, 2014. "A production-inventory model for a two-echelon supply chain when demand is dependent on sales teams׳ initiatives," International Journal of Production Economics, Elsevier, vol. 155(C), pages 249-258.
    17. Sajadieh, Mohsen S. & Fallahnezhad, Mohammad Saber & Khosravi, Maryam, 2013. "A joint optimal policy for a multiple-suppliers multiple-manufacturers multiple-retailers system," International Journal of Production Economics, Elsevier, vol. 146(2), pages 738-744.
    18. B. C. Giri & A. Chakraborty & T. Maiti, 2017. "Effectiveness of consignment stock policy in a three-level supply chain," Operational Research, Springer, vol. 17(1), pages 39-66, April.

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