Inventory model having preservation technology with fix lifetime under two level trade credit policy

Deep Kamal Sharma, Ompal Singh

Abstract


Supply-chain management involves moving storage supplies from origin to consumption, with manufacturers running production based on quadratic demand, distributors and retailers monitoring inventory. When a new product is released, demand often rises linearly and then declines dramatically when an alternative becomes available. Shortages are not allowed. Players' inventory will decrease at a rate of (1/(1+m-t)), where m is fixed lifetime, greater than the replenishment time. Deteriorating goods experience constant mass loss or usefulness, but preservation technology can help the damaged item to be consumed. Retailers with direct customer relationships can reduce stock spoilage through good warehouses. Manufacturers' storage systems have a higher deterioration rate. Two-tier trade credit financing is examined in this model. Distributors offer specific credit terms to stores, while manufacturers provide a grace period for invoicing. Distributors and retailers must pay interest on unsold inventories if invoices aren't settled on time. An integrated storage system reduces costs by minimizing costs through multiple shipments from manufacturers to distributors and retailers, and by adjusting replenishment times for each player. The resolution process is designed so that the supply chain operator gets the best possible decision. Therefore, results are authorized using mathematical examples for different scenarios. Management decisions are suggested.

Keywords


Fix life-time; Inventory; Linear demand; Preservation technology; Supply-chain management; Two level trade credit

Full Text:

PDF


DOI: http://doi.org/10.11591/ijeecs.v35.i1.pp610-619

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Indonesian Journal of Electrical Engineering and Computer Science (IJEECS)
p-ISSN: 2502-4752, e-ISSN: 2502-4760
This journal is published by the Institute of Advanced Engineering and Science (IAES) in collaboration with Intelektual Pustaka Media Utama (IPMU).

shopify stats IJEECS visitor statistics