Preservation effort effects on retailers and manufacturers in integrated multi-deteriorating item discrete supply chain model

This paper studies the multi-deteriorating item discrete supply chain to realize considerable savings by aggregating the replenishment. The present integrated replenishment policy has already been widely applied in a variety of industries. This study deals with an integrated multi-deteriorating item replenishment problem with preservation effort and discrete demand rate and discrete order quantity. Most existing studies about preservation effort focused on a single-item replenishment policy. However, integrated replenishment has been extensively applied in many industries to take advantage of economies of scale in preservation. Since it is difficult to solve this problem directly, the necessary and sufficient conditions with these properties are derived; a solution procedure and an algorithm using heuristic approach are developed to obtain the optimal solutions. Numerical examples, comparative analysis and sensitivity analyses are also provided and tested to elucidate the multi-deteriorating item discrete supply chain model with preservation efforts. The results reveal that the extensions of the model provide a wider and reasonable situation in practice, so that the annual channel profit can be maximized.

[1]  A. Raman,et al.  Aligning incentives in supply chains. , 2004, Harvard business review.

[2]  Candace Arai Yano,et al.  The economic lot and delivery scheduling problem: models for nested schedules , 1995 .

[3]  S. Viswanathan,et al.  A New Optimal Algorithm for the Joint Replenishment Problem , 1996 .

[4]  Morris A. Cohen.  Joint pricing and ordering policy for exponentially decaying inventory with known demand , 1977 .

[5]  M. Hammer,et al.  The superefficient company. , 2001, Harvard business review.

[6]  S. Shinn.  Determining optimal retail price and lot size under day-terms supplier credit , 1997 .

[7]  S. Viswanathan,et al.  Coordinating supply chain inventories through common replenishment epochs , 2001, Eur. J. Oper. Res..

[8]  Tsung-Hui Chen,et al.  Optimizing Supply Chain Collaboration Based on Joint Replenishment and Channel Coordination , 2005 .

[9]  Ming-Jong Yao,et al.  A global optimum search algorithm for the joint replenishment problem under power-of-two policy , 2003, Comput. Oper. Res..

[10]  Yu-Chung Tsao,et al.  Joint pricing and replenishment decisions for deteriorating items with lot-size and time-dependent purchasing cost under credit period , 2007, Int. J. Syst. Sci..

[11]  Richard Y. K. Fung,et al.  A new method for joint replenishment problems , 2001, J. Oper. Res. Soc..

[12]  S. Mondal,et al.  An integrated inventory model with warranty dependent credit period under two policies of a manufacturer , 2018, OPSEARCH.

[13]  P. Miranda,et al.  INCORPORATING INVENTORY CONTROL DECISIONS INTO A STRATEGIC DISTRIBUTION NETWORK DESIGN MODEL WITH STOCHASTIC DEMAND , 2004 .

[14]  Lu Lu.  A one-vendor multi-buyer integrated inventory model , 1995 .

[15]  M. Frohlich,et al.  Demand chain management in manufacturing and services: web-based integration, drivers and performance , 2002 .

[16]  Jen-Ming Chen,et al.  The profit-maximization model for a multi-item distribution channel , 2007 .

[17]  Nejib Ben-Khedher,et al.  The Multi-Item Joint Replenishment Problem with Transportation and Container Effects , 1994, Transp. Sci..

[18]  M. Khouja.  Optimizing inventory decisions in a multi-stage multi-customer supply chain , 2003 .

[19]  Kun-Jen Chung.  A theorem on the determination of economic order quantity under conditions of permissible delay in payments , 1998, Comput. Oper. Res..

[20]  S. Viswanathan.  Note. Periodic Review s, S Policies for Joint Replenishment Inventory Systems , 1997 .

[21]  Tsung-Hui Chen,et al.  The multi-item replenishment problem in a two-echelon supply chain: the effect of centralization versus decentralization , 2005, Comput. Oper. Res..

[22]  C. Srinivas,et al.  Decentralized production–distribution planning in multi-echelon supply chain network using intelligent agents , 2017 .

[23]  M.J.G. van Eijs,et al.  Multi-item inventory systems with joint ordering and transportation decisions , 1994 .

[24]  M. J. Rosenblatt,et al.  The effectiveness of heuristic algorithms for multi-item inventory systems with joint replenishment costs , 1985 .

[25]  H. Wee,et al.  Preservation technology investment for deteriorating inventory , 2010 .

[26]  Pinar Keskinocak,et al.  Dynamic pricing in the presence of inventory considerations: research overview, current practices, and future directions , 2003, IEEE Engineering Management Review.

[27]  D. K. Bhattacharya.  On multi-item inventory , 2005, Eur. J. Oper. Res..

[28]  Terry A. Taylor,et al.  Supply Chain Coordination Under Channel Rebates with Sales Effort Effects , 2002, Manag. Sci..

[29]  Candace Arai Yano,et al.  The economic lot and delivery scheduling problem: the common cycle case , 1995 .

[30]  M. Marn,et al.  Managing price, gaining profit. , 1992, Harvard business review.

[31]  Suresh Kumar Goyal.  Economic ordering policy for jointly replenished items , 1988 .

[32]  T.-H. Chen,et al.  Effects of joint replenishment and channel coordination for managing multiple deteriorating products in a supply chain , 2005, J. Oper. Res. Soc..

[33]  C. Jaggi,et al.  A joint approach for setting unit price and the length of the credit period for a seller when end demand is price sensitive , 2003 .

[34]  Wenyih Lee.  A joint economic lot size model for raw material ordering, manufacturing setup, and finished goods delivering , 2005 .

[35]  S. Graves.  Note---On the Deterministic Demand Multi-Product Single-Machine Lot Scheduling Problem , 1979 .

[36]  Qinan Wang,et al.  Coordination mechanisms of supply chain systems , 2007, Eur. J. Oper. Res..

[37]  Yu-Chung Tsao,et al.  A MULTI-ITEM SUPPLY CHAIN WITH CREDIT PERIODS AND WEIGHT FREIGHT COST DISCOUNTS , 2012 .

[38]  Edward P. C. Kao,et al.  A Multi-Product Dynamic Lot-Size Model with Individual and Joint Set-up Costs , 1979, Oper. Res..

[39]  Hau L. Lee.  The triple-A supply chain. , 2004, Harvard business review.

[40]  Horng-Jinh Chang,et al.  An inventory model for deteriorating items with linear trend demand under the condition of permissible delay in payments , 2001 .

[41]  Dev Joneja,et al.  The Joint Replenishment Problem: New Heuristics and Worst Case Performance Bounds , 1990, Oper. Res..

[42]  Eric Sucky,et al.  Coordinated order and production policies in supply chains , 2004, OR Spectr..

[43]  Ping-Hui Hsu,et al.  Horizontal Suppliers Coordination with Uncertain Suppliers Deliveries , 2005 .