Cost Minimization Policy for Manufacturer in a Supply Chain Management System with Two Rates of Production under Inflationary Condition

Abstract

This article presents a production inventory model for deteriorating goods with two different rates of production. The manufacturer starts manufacturing the items at a lower rate to avoid a huge investment at the initial stage and reduce the products' holding cost. However, when the stock level reaches a prefixed level, he switches on to a higher production rate to avoid shortage caused by an insufficient stock of the items. Moreover, the impact of inflation and the time value of money on the manufacturing system’s cost is considered here, which harms any business by reducing the value of an investment with time. We determined the optimum production times at both the low and high production rates by minimizing the system's total cost. Numerical examples illustrated the applicability of this proposed model. Sensitivity analysis studied the effect of changes in the parameters associated with this model on the optimal decision variables. This numerical experiment was done in LINGO 18.0 software. Results showed that the production strategy taken by the manufacturer helped reduce his total cost.

A Three-Echelon Dual-Channel Supply Chain Model with Learning Effect Under the Return Policy

“…Here, the supplier sells (1 − 𝑦)𝑄 units of raw materials to the manufacturer at a rate 𝐷 𝑚 during (0, 𝑡 1 ) in equation (1). Therefore,…”

“…Companies and business organizations are striving to develop marketing strategies to sustain their existence [1]. Supply chain management (SCM) is one such effective strategy that presents an integrated way to resolve business-related issues to ensure better customer service and optimize business profit [2][3][4][5][6][7].…”

Measuring the performance of retailers during the COVID-19 pandemic: Embedding optimal control theory principles in a dynamic data envelopment analysis approach

“…This approach represents an advancement due to two reasons. First, it incorporates the inflationary, a non-neglectable factor in retailing [11] , [12] , [13] , [14] , not considered in previous efforts [15] , [16] , [17] , [18] , [19] , [20] , [21] . Second, the proposed approach incorporates fundamental variables in retailing performance, such as inventory and capacity slacks [10] .…”

Supply Chain Disturbance Management Scheduling Model Based on HPSO Algorithm

“…With the popularization of computer technology and the development of market economy, enterprises are shifting their focus from themselves to supply chain, and supply chain management is particularly important for enterprise management [1][2]. Supply chain management is a management mode that effectively organizes suppliers, manufacturers and distributors to jointly complete product production, transportation and distribution on the premise of minimizing the cost of the entire supply chain [3][4]. However, the supply chain system itself is a complex and dynamic network, which is faced with many challenges from uncontrollable factors both internally and externally, such as resource shortage, equipment failure, and market demand fluctuations.…”