Integrating credit and replenishment policies for deteriorating items under quadratic demand in a three echelon supply chain

ABSTRACT

This paper deals with a supply chain that is comprised of a single manufacturer, a single distributor and a single retailer. This supply chain is studied and analysed when demand is time and credit period dependent. The items in each member of the chain are subject to deteriorate at a constant rate. The objective is to minimise the total cost of the supply chain with respect to number of shipments among members, cycle time and credit period offered by the distributor to retailer. Scenarios are established and illustrated with numerical examples. Sensitivity analysis is done to deduce managerial insights.

KEYWORDS:

• Joint decision for three players
• credit-dependent quadratic demand
• constant deterioration
• two-level credit period

MATHEMATIC SUBJECT CLASSIFICATION 2010:

• 90B05

Acknowledgements

The authors are thankful to anonymous reviewers for their productive comments.

Disclosure statement

No potential conflict of interest was reported by the authors.

ORCID

Nita H. Shah http://orcid.org/0000-0003-1605-4778

Urmila Chaudhari http://orcid.org/0000-0001-7524-3902

Additional information

Funding

The first author is thankful to DST-FIST-file # MSI 097 for the financial assistance to carry out this research. The third author was supported by the Tecnológico de Monterrey Research Group in Industrial Engineering and Numerical Methods 0822B01006.

Notes on contributors

Nita H. Shah

Nita H. Shah is a Professor and Head in the Department of Mathematics at the Gujarat University, Ahmedabad. She has 20 years of research experience in inventory management, forecasting and information technology and information systems. She has published 300+ articles in international journals, including APJOR (Singapore), International Journal of Production Economics, Omega, CCERO (Belgium), ECPE (Romania), Measuring, Control and Simulation (France), JIOS (India), IJOMS (India), Industrial Engineering (India), European Journal of Operational Research, IJOR, IJMOR, IJBPSCM, IJLSM, IJSSOL, among others.

Urmila Chaudhari

Urmila Chaudhari is a lecturer in government polytechnic Dahod, Dahod, Gujarat, India. Her research interests are in the field of supply chain inventory modelling for different payment options. Her articles have been published in Revista Investigacion Operacional, JOBARI and IJIEC, Taylor and Francis, Springer, IGI Global, Growing Sciences, IJOQM, AMSE, IJLSM and IJMOR.

Leopoldo Eduardo Cárdenas-Barrón

Leopoldo Eduardo Cárdenas-Barrón is currently a Professor at School of Engineering and Sciences at Tecnológico de Monterrey, Campus Monterrey, México. He is also a faculty member in the Department of Industrial and Systems Engineering at Tecnológico de Monterrey. He was the associate director of the Industrial and Systems Engineering programme from 1999 to 2005. Moreover, he was also the associate director of the Department of Industrial and Systems Engineering from 2005 to 2009. His research areas include primarily related to inventory planning and control, logistics, and supply chain. He has published papers and technical notes in several international journals. He has co-authored one book in the field of Simulation in Spanish. He is also editorial board member in several international journals.