OPTIMAL DOWN – STREAM CREDIT PERIOD AND REPLENISHMENT TIME FOR DETERIORATING INVENTORY IN A SUPPLY CHAIN
NITA H. SHAH *
Department of Mathematics, Gujarat University, Ahmedabad – 380009, Gujarat, India
URMILA CHAUDHARI
Department of Mathematics, Parul Institute of Engineering and Technology, Vadodara-391760, Gujarat, India
MRUDUL Y. JANI
Department of Mathematics, Parul Institute of Engineering and Technology, Vadodara-391760, Gujarat, India
*Author to whom correspondence should be addressed.
Abstract
In this paper, a supply chain comprising of three players viz. manufacturer, distributor and retailer is analyzed when demand depends upon the credit period offered by the distributor to the retailer. The units in inventory of each period are subject to deterioration at a constant rate. The manufacturer has finite production capacity and manufacturers proportional to the demand rate. The manufacturer offers credit period to the distributor. The total cost of the supply chain is minimized with respect to number of shipments among players, replenishment time and credit period. The model is supported with numerical examples. The best possible policy is worked out and sensitivity is carried out to search out critical inventory parameters. The players are advocated to join hand to hand to run a business by joint decisions.
Keywords: Supply chain, credit-dependent demand, deterioration, two-level trade credit