On the Optimality of Inventory and Shipment Policies in a Two echelon Supply Chain under Trade Credit with Finite Production Rate

  • Seelam krugon, Dega Nagaraju

Abstract

In the universal competition of environment, to face the global challenges around the business, it has become more traditional of providing trade credit by the manufacturer to the retailer as part of improving the sales growth. The retailers need not to pay the manufacturer immediately whenever retailer received the goods, if a manufacturer offers credit period to the retailer under finite production. In this scenario focusing on the overall performance of the supply chain in terms of cycle time variations, inventory levels, rate of shipment and the annual total relevant cost of the entire supply chain is essential. The objective of the proposed work is to illustrate the optimality of cycle time, levels of inventory, rate of shipment and the total relevant cost of the coordinated supply chain under the new design of trade credit. As well as the optimal values of total ordering cost (TOC), total carrying cost (TCC) and total transportation cost (TTC) are evaluated. Mathematical models are developed to determine cycle time, inventory levels, rate of shipment and the annual total relevant cost of the coordinated supply chain. Finally, numerical examples are solved to illustrate the theoretical results and also the sensitivity analysis is carried out.

Published
2020-06-01
How to Cite
Seelam krugon, Dega Nagaraju. (2020). On the Optimality of Inventory and Shipment Policies in a Two echelon Supply Chain under Trade Credit with Finite Production Rate . International Journal of Advanced Science and Technology, 29(7), 3583-3599. Retrieved from http://sersc.org/journals/index.php/IJAST/article/view/22089
Section
Articles