A comprehensive inventory management system for non-instantaneous deteriorating items in supplier- retailer-customer supply chains

Abstract

This study develops an inventory management system for non-instantaneous deteriorating items in a supplier-retailer-customer supply chain. The proposed model considers carbon emissions during production and applies a carbon tax to regulate the emission. Promotional prices are considered to boost demand. The supplier offers a credit period to the retailer and the retailer to the customers. Imperfect products in the proposed model are separated from the lot using an inspection process performed by the retailer. Finally, a learning process is proposed to spot misclassified products and avoid using misclassification errors. Two models with and without shortages are further developed in this study. The proposed model considers imperfect quality, non-instantaneous deteriorating items based on learning effects, multi-variate demands, and multi-credit periods with the carbon tax. Models with and without shortages are also developed. Numerical examples and sensitivity analysis are provided to verify the applicability and demonstrate the efficacy of the model proposed in this study.

Keywords

• Supply chain
• Inventory management
• Imperfect production
• Inspection errors and learning
• Multi-credit period offers
• Multi-variate demand