Volume 55, 2021Regular articles published in advance of the transition of the journal to Subscribe to Open (S2O). Free supplement sponsored by the Fonds National pour la Science Ouverte
|Page(s)||S673 - S698|
|Published online||02 March 2021|
Optimal ordering policy in a two-echelon supply chain model with variable backorder and demand uncertainty
Department of Mathematics, Jadavpur University, Jadavpur, Kolkata 700032, India
* Corresponding author: firstname.lastname@example.org
Accepted: 27 January 2020
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.
Mathematics Subject Classification: 90B05 / 90B06
Key words: Integrated model / lead time reduction / controllable backorder / trade-credit financing / distribution-free approach
© EDP Sciences, ROADEF, SMAI 2021
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