Impact of Supply Chain Coordination for Deteriorating Goods with Stock-Dependent Demand Rate

Chuanxu Wang

School of Economy and Management，Shanghai Maritime University Shanghai，China.

DOI: 10.4236/jssm.2008.12012                

Abstract

To analyze effects of supply chain coordination for deteriorating goods with stock-dependent demand rate, this paper presents decision models for order quantity and ordering cycle under two scenarios( decentralized supply chain, cen-tralized supply chain). Numerical study is carried out to demonstrate the effectiveness of the proposed models, and to analyze the impact of supply chain coordination on supply chain profit. Sensitivity analysis is performed to study the impact of different parameters associated with the model, such as the rate of deterioration, the retailer’s purchase cost, the manufacturer’s production cost, the retailer’s and manufacturer’s holding cost on the supply chain profit increase percentages generated by the supply chain coordination.

Keywords

Supply Chain coordination, Deteriorating goods, Ordering cycle, Stock-dependent demand

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1]	Chen, J. M., Chen T. H. Effects of joint replenishment and channel coordination for managing multiple deteriorating products in a supply chain, Journal of the operational re-search society, 2005, 56: 1224-1234
[2]	Ghare P. N.， Schrader GF. A model for exponentially decaying inventories, Journal of Industry Engineering, 1963, 15: 238-243
[3]	Covert R. P., Philip GC. An EOQ model for items with Weibull distribution deterioration, AIIE Transactions, 1973, 5: 323-326
[4]	Philip G. C. A generalized EOQ model for itmes with Weibull distribution deterioration, AIIE Transactions, 1974, 6: 159-162
[5]	Tadikamalla，P. R. An EOQ inventory model for items with Gamma distributed deterioration. AIIE Transactions, 1978, 10: 78
[6]	Moon I., Lee S. The effects of inflation and time value of money on an economic order quantity model with a ran-dom product life cycle, European Journal of Operational Research, 2000, 125: 588-601
[7]	Dave, U., Patel L. K. ( )policy inventory model for deterioration items with time proportional demand. Jour-nal of the operational research society, 1981, 32: 137-142
[8]	Sachan, R. S.On ( )policy inventory model deterio-ration items with time proportional demand. Journal of the operational research society, 1984, 35: 1013-1019
[9]	Bahari-Kashani H., 1989, Replenishment schedule for deteriorating items with time-proportional demand. Jour-nal of Operational Research Society, 40, 75-81
[10]	Bose, S., Goswami, A., Chaudhuri,K.S., 1995. An EOQ model for deteriorating items with linear-dependent de-mand rate and shortages under inflation and time dis-counting. Journal of the Operational Research Society, 46. 771-782
[11]	Silver,E. A., Peterson,R., 1985. Decision systems for in-ventory management and production planning, 2nd edition, Wiley, New York
[12]	Gupta, R., Vrat, P., 1986. Inventory model for stock-dependent consumption rate. Opsearch, 23, 19-24
[13]	Mandal, B. N., Phaujdar, S., 1989a. A note on an inven-tory model with stock-dependent consumption rate. Op-search, 26, 43-46
[14]	Baker, R. C. and Urban,T. L., 1988. A deterministic in-ventory system with an inventory-level-dependent demand rate. Journal of Operational Research Society, 39(9):823-831
[15]	Datta, T. K., Pal, A. K., 1991. Effects of inflation and time-value of money on an inventory model with linear time-dependent demand rate and shortages. European Journal of Operational Research, 52, 1-8
[16]	Mandal, B. N., Phaujdar, S., 1989b. An inventory model for deteriorating items and stock-dependent consumption rate. Journal of Operational Research Society, 40(5), 483-488
[17]	Pal, S., Goswami, A., Chaudhuri, K.S., 1993. A determin-istics inventory model for deteriorating items with stock-dependent demand rate. International Journal of Production Economics, 32,291-299
[18]	Spiegel, M. R., 1960. Applied Differential Equations. Prentice-Hall: Englewood Cliffs, NJ