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Joint location, inventory, and preservation decisions for non-instantaneous deterioration items under delay in payments

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  • Yu-Chung Tsao

Abstract

This study models a joint location, inventory and preservation decision-making problem for non-instantaneous deteriorating items under delay in payments. An outside supplier provides a credit period to the wholesaler which has a distribution system with distribution centres (DCs). The non-instantaneous deteriorating means no deterioration occurs in the earlier stage, which is very useful for items such as fresh food and fruits. This paper also considers that the deteriorating rate will decrease and the reservation cost will increase as the preservation effort increases. Therefore, how much preservation effort should be made is a crucial decision. The objective of this paper is to determine the optimal locations and number of DCs, the optimal replenishment cycle time at DCs, and the optimal preservation effort simultaneously such that the total network profit is maximised. The problem is formulated as piecewise nonlinear functions and has three different cases. Algorithms based on piecewise nonlinear optimisation are provided to solve the joint location and inventory problem for all cases. Computational analysis illustrates the solution procedures and the impacts of the related parameters on decisions and profits. The results of this study can serve as references for business managers or administrators.

Suggested Citation

  • Yu-Chung Tsao, 2016. "Joint location, inventory, and preservation decisions for non-instantaneous deterioration items under delay in payments," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(3), pages 572-585, February.
    • Handle: RePEc:taf:tsysxx:v:47:y:2016:i:3:p:572-585
    DOI: 10.1080/00207721.2014.891672
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    Cited by:

    1. Falguni Mahato & Chandan Mahato & Gour Chandra Mahata, 2023. "Sustainable optimal production policies for an imperfect production system with trade credit under different carbon emission regulations," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(9), pages 10073-10099, September.
    2. Mei-Chuan Cheng & Hui-Chiung Lo & Chih-Te Yang, 2023. "Optimizing Pricing, Pre-Sale Incentive, and Inventory Decisions with Advance Sales and Trade Credit under Carbon Tax Policy," Mathematics, MDPI, vol. 11(11), pages 1-18, May.
    3. YuJan Shen & KuanFu Shen & ChihTe Yang, 2019. "A Production Inventory Model for Deteriorating Items with Collaborative Preservation Technology Investment Under Carbon Tax," Sustainability, MDPI, vol. 11(18), pages 1-18, September.
    4. Saha, Subrata & Chatterjee, Debajyoti & Sarkar, Biswajit, 2021. "The ramification of dynamic investment on the promotion and preservation technology for inventory management through a modified flower pollination algorithm," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    5. Reza Maihami & Behrooz Karimi & Seyyed Mohammad Taghi Fatemi Ghomi, 2017. "Effect of two-echelon trade credit on pricing-inventory policy of non-instantaneous deteriorating products with probabilistic demand and deterioration functions," Annals of Operations Research, Springer, vol. 257(1), pages 237-273, October.
    6. Chaitanyakumar N. Rapolu & Deepa H. Kandpal, 2020. "Joint pricing, advertisement, preservation technology investment and inventory policies for non-instantaneous deteriorating items under trade credit," OPSEARCH, Springer;Operational Research Society of India, vol. 57(2), pages 274-300, June.

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