Multi-item deteriorating two-echelon inventory model with price- and stock-dependent demand: A trade-credit policy

By Magfura Pervin, Sankar Kumar Roy, Gerhard-Wilhelm Weber. 2017

85 citations recorded by the source corpus.

This article is concerned with a multi-item inventory model for deteriorating items. The model is formed on the basis of a two-level supply chain policy, i.e., based on manufacturer's and retailer's perspective. The deterioration rate is considered as constant. The demand factor of any items suffer from a large amount of stock level; so, we consider stock-dependent demand function. The demand of any item is also dependent on its selling price; thus, a price-dependent demand function is introduced here. The retailer adopts the trade-credit policy for his customers in order to promote market competitiveness. He can earn revenue and interest after the customer pays the amount of purchasing cost to the retailer until the end of the trade-credit period, offered by the supplier. Shortages are allowed in the retailer's model as it is a very realistic item, too. A price discount on backordered commodities is offered for those customers who are willing to backorder their demand. Thereafter, we present an easy analytical solution procedure to find the total profit for both manufacturer and retailer. We also use the classical game theory and Nash equilibrium approach to find an optimal solution of the joint profit. The results are discussed with several numerical examples to illustrate our model and to provide some managerial insights related to the model. Furthermore, a parametric sensitivity analysis of the optimal solutions is provided and a concavity figure of our profit function is supplied to stabilize our model. The paper ends with a conclusion and an outlook to future research projects.

Subfields: Management Information Systems, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/49048c13a6369e6c184345e69ee856427e7e1cf3

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In Management Information Systems

1. Sankar Kumar Roy
2. Magfura Pervin
3. Gerhard-Wilhelm Weber
4. Haripriya Barman

In Strategy and Management

1. Sankar Kumar Roy
2. Magfura Pervin
3. Gerhard-Wilhelm Weber

Citations in the corpus

• Back-ordered inventory model with inflation in a cloudy-fuzzy environment (2021, background): “[33], where holding cost of manufacturer as well as retailer was dependent on purchasing cost per item per unit time.”