An Integrated Supplier-Buyer Inventory Model with Conditionally Free Shipment under Permissible Delay in Payments
It is well known that production, distribution, marketing, inventory control, and financing all/each have a positive impact on the performance of a supply chain. Despite the growing interest in the development of integrated inventory models, the in...
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| Main Author: | |
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| Format: | Article |
| Language: | English |
| Published: |
Wiley
2010-01-01
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| Series: | Abstract and Applied Analysis |
| Online Access: | http://dx.doi.org/10.1155/2010/594246 |
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| Summary: | It is well known that production, distribution,
marketing, inventory control, and financing all/each
have a positive impact on the performance of a supply
chain. Despite the growing interest in the development
of integrated inventory models, the interactions
between these elements of a supply chain may not be
efficiently included, resulting in a restricted supply
chain model presentation. To incorporate this
phenomenon, a mathematical model that tackles the
interdependent relationships between these
aforementioned elements is developed in this paper.
This study considers the determination of the optimal
pricing, ordering, and delivery policies of a
profit-maximizing supply chain system, faced with (1)
unit wholesale price of the supplier is set based on
unit production cost, (2) unit production cost is
taken as a function of demand rate and production
rate, (3) the supplier's production rate is
adjusted according to market demand, (4) market demand
depends upon buyer's selling price, (5) a free
freight is offered if the buyer's order exceeds a
certain minimum requirement, and (6) a constant credit
period is offered by the supplier to stimulate the
demand of the buyer. Algorithm for computing the
optimal policies is derived. The sensitivity of the
optimal results with respect to those parameters which
directly influence the production and transportation
costs is also examined. |
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| ISSN: | 1085-3375 1687-0409 |