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Supply chain model for a deteriorating product with time-varying demand and production rate

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  • B C Giri

    (Jadavpur University, Kolkata, India)

  • T Maiti

    (Jadavpur University, Kolkata, India)

Abstract

The paper develops a two-echelon supply chain model with a single-buyer and a single-vendor. The buyer sells a seasonal product over a short selling period and its inventory is subject to deterioration at a constant rate over time. The vendor's production rate is dependent on the buyer's demand rate, which is a linear function of time. Also, the vendor's production process is not perfectly reliable; it may shift from an in-control state to an out-of-control state at any time during a production run and produce some defective (non-conforming) items. Assuming that the vendor follows a lot-for-lot policy for replenishment made to the buyer, the average total cost of the supply chain is derived and an algorithm for finding the optimal solution is developed. The numerical study shows that the supply chain coordination policy is more beneficial than those policies obtained separately from the buyer's and the vendor's perspectives.

Suggested Citation

  • B C Giri & T Maiti, 2012. "Supply chain model for a deteriorating product with time-varying demand and production rate," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 63(5), pages 665-673, May.
    • Handle: RePEc:pal:jorsoc:v:63:y:2012:i:5:p:665-673
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    Citations

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    Cited by:

    1. Bai, Qingguo & Chen, Mingyuan & Xu, Lei, 2017. "Revenue and promotional cost-sharing contract versus two-part tariff contract in coordinating sustainable supply chain systems with deteriorating items," International Journal of Production Economics, Elsevier, vol. 187(C), pages 85-101.
    2. Chiu, Singa Wang & Wu, Cheng-Sian & Tseng, Chao-Tang, 2019. "Incorporating an expedited rate, rework, and a multi-shipment policy into a multi-item stock refilling system," Operations Research Perspectives, Elsevier, vol. 6(C).
    3. Zhang, Jianxiong & Liu, Guowei & Zhang, Qiao & Bai, Zhenyu, 2015. "Coordinating a supply chain for deteriorating items with a revenue sharing and cooperative investment contract," Omega, Elsevier, vol. 56(C), pages 37-49.
    4. Gökçe Palak & Sandra Duni Ekşioğlu & Joseph Geunes, 2018. "Heuristic algorithms for inventory replenishment with perishable products and multiple transportation modes," IISE Transactions, Taylor & Francis Journals, vol. 50(4), pages 345-365, April.
    5. Jing Lu & Jianxiong Zhang & Fuxiao Lu & Wansheng Tang, 2020. "Optimal pricing on an age-specific inventory system for perishable items," Operational Research, Springer, vol. 20(2), pages 605-625, June.

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