A supply chain model of deteriorating items with raw materials storage costs

Document Type

Conference Proceeding

Publication Date

1-1-2012

Abstract

Companies in a supply chain are linked together through product flows. An optimal integrated production and delivery policy can help these companies increase overall system profit. In this research, an inventory policy for a producer purchasing from multiple buyers is developed. Specifically, we propose an integrated model for a single vendor and multiple buyers accounting for deteriorating items and raw materials cost on the vendor side. We assume equal replenishment and production cycles, and consider a producer and buyers who collaboratively work at minimizing their total operation cost. The model factors in backorder at the buyers, raw material costs of the producer, deteriorating items at each party in the supply chain (at the producer's level, buyers' level, and during transport) and remanufacturing product at the producer. The solution algorithm is developed, and a numerical example is also presented. An analysis is also performed to explore the sensitivity of some important system parameters.

Publication Source (Journal or Book title)

62nd IIE Annual Conference and Expo 2012

First Page

1663

Last Page

1672

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