scholarly journals Production rate and lot size-dependent lead time reduction strategies in a supply chain model with stochastic demand, controllable setup cost and trade-credit financing

2020 ◽  
Author(s):  
Monami Das Roy ◽  
Shib Sankar Sana
Keyword(s):  
Production Rate ◽  
Lead Time ◽  
Trade Credit ◽  
Chain Model ◽  
Lot Size ◽  
Setup Cost ◽  
Lead Time Reduction ◽  
Supply Chain Model ◽  
Reduction Strategies ◽  
Credit Financing

This study explores simultaneous reduction strategies of lead time and setup cost in a two-stage supply chain model under trade-credit financing. Lead time depends on avariable production rate and lot size. It consists of setup, production, and transportation time which are shortened to reduce lead time. Although double safety factors are considered to avoid stock-out; but still backorders take place as the demand during the lead time is stochastic.Setup cost is reduced by including an extra investment cost. In addition, the vendor offers a fixed credit period to the buyer to settle the account. The objective is to minimize the integrated expected total cost and optimize the order quantity, number of deliveries, setup and transportation time, setup cost, safety factor for the first batch, and the production rate. A multi-variable optimization technique is used for these purposes. Furthermore, a numerical example together with managerial insights is provided for the establishment and applicability of the proposed model.The numerical results show that the introduction of setup cost reduction and trade-credit financing along with lead time reduction is more beneficial by means of integrated expected total cost reduction.

scholarly journals Supply Chain Model with Stochastic Lead Time, Trade-Credit Financing, and Transportation Discounts

2017 ◽  
Vol 2017 ◽  
pp. 1-14 ◽  
Author(s):  
Sung Jun Kim ◽  
Biswajit Sarkar
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Trade Credit ◽  
Coordination Mechanism ◽  
Chain Model ◽  
Credit Policy ◽  
Setup Cost ◽  
Credit Period ◽  
Supply Chain Model ◽  
Credit Financing

This model extends a two-echelon supply chain model by considering the trade-credit policy, transportations discount to make a coordination mechanism between transportation discounts, trade-credit financing, number of shipments, quality improvement of products, and reduced setup cost in such a way that the total cost of the whole system can be reduced, where the supplier offers trade-credit-period to the buyer. For buyer, the backorder rate is considered as variable. There are two investments to reduce setup cost and to improve quality of products. The model assumes lead time-dependent backorder rate, where the lead time is stochastic in nature. By using the trade-credit policy, the model gives how the credit-period would be determined to achieve the win-win outcome. An iterative algorithm is designed to obtain the global optimum results. Numerical example and sensitivity analysis are given to illustrate the model.

scholarly journals Optimal ordering policy in a two-echelon supply chain model with variable backorder and demand uncertainty

2020 ◽  
Author(s):  
Sumon Sarkar ◽  
B. C. Giri
Keyword(s):  
Supply Chain ◽  
Lead Time ◽  
Demand Uncertainty ◽  
Trade Credit ◽  
Chain Model ◽  
Order Quantity ◽  
Optimal Decisions ◽  
Solution Algorithms ◽  
Supply Chain Model ◽  
Credit Financing

The paper investigates a two-echelon production-delivery supply chain model for products with stochastic demand and backorder-lost sales mixture under trade-credit financing. The manufacturer delivers the retailer's order quantity in a number of equal-sized shipments. The replenishment lead-time is such that it can be crashed to a minimum duration at an additional cost that can be treated as an investment. Shortages in the retailer's inventory are allowed to occur and are partially backlogged with a backlogging rate dependent on customer's waiting time. Moreover, the manufacturer offers the retailer a credit period which is less than the reorder interval. The model is formulated to find the optimal solutions for order quantity, safety factor, lead time, and the number of shipments from the manufacturer to the retailer in light of both distribution-free and known distribution functions. Two solution algorithms are provided to obtain the optimal decisions for the integrated system. The effects of controllable lead time, backorder rate and trade-credit financing on optimal decisions are illustrated through numerical examples.

scholarly journals Lead-time Dependent Ordering Cost Reduction and Trade-credit: A Supply Chain Model with Stochastic Demand and Rework

2020 ◽  
Vol 8 (5) ◽  
pp. 5113-5117
Keyword(s):  
Supply Chain ◽  
Cost Reduction ◽  
Lead Time ◽  
Trade Credit ◽  
Chain Model ◽  
Lot Size ◽  
Expected Cost ◽  
Production Run ◽  
Supply Chain Model ◽  
Ordering Cost Reduction

This study focuses on an integrated vendor-buyer supply chain model where the lead-time and ordering cost reduction act dependently. The lead time demand of a product follows a normal distribution. The manufacturing process is imperfect. During production run time, a certain percentage of defective products are produced, which are immediately reworked. Trade-credit financing has been taken into consideration. The goal of this study is to minimize the joint total expected cost by providing an inter-dependent reduction strategy of lead-time and ordering cost along with the determination of the optimal values of lead-time, number of deliveries, order lot size, ordering cost, lead-time crashing cost, and the joint total expected cost. A solution algorithm and a numerical example are presented to illustrate and establish the integrated model. This model can be used in textiles, automobiles and computers industries.

An optimal inventory model with interaction of lot size, production rate and lead-time in a fuzzy back-order system

2019 ◽  
Vol 53 (2) ◽  
pp. 517-538
Author(s):  
S. Priyan ◽  
P. Mala ◽  
S. Tiwari
Keyword(s):  
Decision Making ◽  
Production Rate ◽  
Lead Time ◽  
Trade Credit ◽  
Strategic Decision ◽  
Sensitivity Analyses ◽  
Order System ◽  
Lot Size ◽  
Order Rate ◽  
Back Order

This paper examines the decision-making about the interaction of lot size, production rate and lead time between a vendor and a buyer with the consideration of trade credit and fuzzy back-order rate. We assume that the lead time demand is distribution free and the back-order rate is triangular fuzzy number. An economic model is design to determine the optimal lot-size, production rate and lead time while minimizing system total cost. A minimax approach is applied to tackle the model and designed an iterative algorithm to obtain the optimal strategy. Numerical example and sensitivity analyses are given to demonstrate the performance of the proposed methodology and to highlight the differences between crisp and the fuzzy cases. This paper provides optimal decision support tools for managers in the form of mathematical model that improve operational, tactical, and strategic decision making in the fuzzy system. This paper aims to raise the awareness of managers with regard to realistic inventory problems.

scholarly journals Effect of Unequal Lot Sizes, Variable Setup Cost, and Carbon Emission Cost in a Supply Chain Model

2015 ◽  
Vol 2015 ◽  
pp. 1-13 ◽  
Author(s):  
Biswajit Sarkar ◽  
Sharmila Saren ◽  
Debjani Sinha ◽  
Sun Hur
Keyword(s):  
Supply Chain ◽  
Carbon Emission ◽  
Graphical Representation ◽  
Chain Model ◽  
Lot Size ◽  
Setup Cost ◽  
Defective Items ◽  
Supply Chain Model ◽  
Investment Function ◽  
Optimum Solution

Due to heavy transportation for single-setup multidelivery (SSMD) policy in supply chain management, this model assumes carbon emission cost to obtain a realistic behavior for world environment. The transportation for buyer and vendor is considered along with setup cost reduction by using an investment function. It is assumed that the shipment lot size of each delivery is unequal and variable. The buyer inspects all received products and returns defective items to vendor for reworking process. Because of this policy, end customers will only obtain nondefective items. The analytical optimization is considered to obtain the optimum solution of the model. The main goal of this paper is to reduce the total cost by considering carbon emission during the transportation. A numerical example, graphical representation, and sensitivity analysis are given to illustrate the model.

Two-echelon imperfect production fuzzy supply chain model for reliability dependent demand with probabilistic deterioration and rework

2021 ◽  
pp. 1-15
Author(s):  
Sudip Adak ◽  
G.S. Mahapatra
Keyword(s):  
Supply Chain ◽  
Production Rate ◽  
Production Cost ◽  
Idle Time ◽  
Chain Model ◽  
Specific Time ◽  
Defective Items ◽  
Imperfect Production ◽  
Supply Chain Model ◽  
Dependent Demand

This paper develops a fuzzy two-layer supply chain for manufacturer and retailer with defective and non-defective types of products. The manufacturer produces up to a specific time, including faulty and non-defective items, and after the screening, the non-defective item sends to the retailer. The retailer’s strategy is to do the screening of items received from the manufacturer; subsequently, the perfect quality items are used to fulfill the customer’s demand, and the defective items are reworked. The retailer considers that customer demand is time and reliability dependent. The supply chain considers probabilistic deterioration for the manufacturer and retailers along with the strategies such as production rate, unit production cost, cost of idle time of manufacturer, screening, rework, etc. The optimum average profit of the integrated model is evaluated for both the cases crisp and fuzzy environments. Managerial insights and the effect of changes in the parameters’ values on the optimal inventory policy under fuzziness are presented.

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