Three-layered integrated inventory model for deteriorating items with quadratic demand and two-level trade credit financing

ABSTRACT

In this study, the three-layered integrated production – inventory model – is formulated in which a distributor and a retailer observe quadratic demand and a manufacturer runs the production proportional to the quadratic demand. The inventory of every player is subject to deterioration at a constant rate. The model considers two-level trade credit financing. The total cost of the integrated inventory system is minimised with respect to a number of shipments from the manufacturer to the distributor and the distributor to the retailer and each player's replenishment times. A solution procedure is worked out to obtain the best possible decision for the players of the supply chain. The results are validated with numerical examples for different scenarios. Managerial decisions are suggested.

Keywords:

• Integrated inventory model
• deterioration
• quadratic demand
• two-level trade credit financing

Acknowledgements

The author is thankful to the associate editor and reviewer for their constructive comments. The author is also thankful to DST-FIST File # MSI-097 for support to carry out this research.

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Notes on contributors

Nita H. Shah

Nita H. Shah is a professor in the Department of Mathematics at Gujarat University, Ahmedabad, Gujarat, India. She received her PhD in inventory control management, operations research. Currently, she is engaged in research in areas of inventory control and management, supply chain management, forecasting and information technology and information systems, neural networks, sensors and image processing. She has more than 325 papers published in international and national journals. She is the author of four books. She is serving as a member of the editorial board of Investigation Operational, Journal of Social Science and Management, International Journal of Industrial Engineering and Computations and Mathematics Today.