Inventory models for non-instantaneous deteriorating items with expiration dates and imperfect quality under hybrid payment policy in the three-level supply chain
Date
2021
Authors
Liao, Jui-Jung
Srivastava, H.M.
Chung, Kun-Jen
Lee, Shih-Fang
Huang, Kuo-Nan
Lin, Shy-Der
Journal Title
Journal ISSN
Volume Title
Publisher
Symmetry
Abstract
This article considers an inventory model for non-instantaneous deteriorating items with
expiration dates, such as seasonal items, first-hand vegetables, and fruits. Interestingly, an inspection
will be performed to manage the quality of the items during the state of no deterioration because it is
difficult to purchase items with 100% perfection. Additionally, we assume that the upstream member
has the power of controlling or influencing downstream members’ decisions. That is, the supplier
asks the retailer for a partial advance payment to avoid cancellation of orders and offers them a
credit payment to stimulate sales; in turn, the customer must pay some cash when placing an order
and pay the remainder in credit for the retailer. The goal of this article is to determine an optimal
replenishment cycle and the total annual cost function, so we explore the functional properties of
the total annual cost function and show that the total annual cost function is convex. Theoretical
analysis of the optimal properties shows the existence and uniqueness of the optimal solution. Then,
we obtain simple and easy solution procedures for the inventory system. Moreover, numerical
analysis of the inventory model is conducted, and the corresponding examples are considered with
a view to illustrating the application of the supply chain model that we have investigated in this
article. Finally, in the concluding section, we have not only provided the motivation and the need for
our usages of mathematical analytic solution procedures based upon the convexity, monotonicity
(increasing and decreasing) and differentiability properties of the object function (that is, the total
annual cost function), which involve some symmetry aspects of the object function, but we have also
indicated the limitations and shortcomings in our investigation, which will naturally lead to some
potential directions for further research on the supply chain model, which we have considered and
mathematically analyzed in this article.
Description
Keywords
inventory modeling, mathematical analytic solution procedures, economic order quantity (EOQ) model, deteriorating products, imperfect quality, hybrid payment policy, non-instantaneous deterioration, expiration date, trade credit financing, permissible delay in payments, object function (that is total annual cost function), supply chain management
Citation
Liao, J., Srivastava, H. M., Chung, K., Lee, S., Huang, K., & Lin, S. (2021). “Inventory models for non-instantaneous deteriorating items with expiration dates and imperfect quality under hybrid payment policy in the three-level supply chain.” Symmetry, 13(9), 1695. https://doi.org/10.3390/sym13091695