Continuous review inventory model with controllable lead time, lost sales rate and order processing cost when the received quantity is uncertain

We consider a continuous review inventory system for inventory model involving lost sales reduction through capital investment cost function and the reduction of lead time further which reduces the ordering cost. To reduce the lost sales rate, two forms of capital investment cost function, viz. logarithmic and power are employed. Two relationships between ordering cost and lead time, viz. linear and logarithmic are considered. We develop four inventory models by taking different combinations of capital investment cost function and ordering cost lead time relationship. Objective of the study is to reduce the total related cost by simultaneously optimizing the order quantity, safety factor, fraction of the shortages during the stock-out period that will be lost and length of lead time. The lead time demand is assumed to follow a mixture of normal distributions. The optimal solution is derived by developing computer programs using the software MATLAB. We also provide four numerical examples to illustrate the models.

Download Full-text

Controllable lead time, service level constraint, and transportation discounts in a continuous review inventory model

RAIRO - Operations Research ◽

10.1051/ro/2015055 ◽

2016 ◽

Vol 50 (4-5) ◽

pp. 921-934 ◽

Cited By ~ 40

Author(s):

Dongmin Shin ◽

Rekha Guchhait ◽

Biswajit Sarkar ◽

Mandeep Mittal

Keyword(s):

Lead Time ◽

Service Level ◽

Inventory Model ◽

Time Service ◽

Continuous Review ◽

Controllable Lead Time

Download Full-text

Three-Echelon Inventory Model with Permissible Delay in Payments under Controllable Lead Time and Backorder Consideration

Mathematical Problems in Engineering ◽

10.1155/2014/809149 ◽

2014 ◽

Vol 2014 ◽

pp. 1-16 ◽

Cited By ~ 4

Author(s):

M. F. Yang ◽

Wei-Chung Tseng

Keyword(s):

Supply Chain ◽

Lead Time ◽

Critical Issue ◽

Solution Procedure ◽

Inventory Model ◽

Permissible Delay In Payments ◽

Inventory Policy ◽

Controllable Lead Time ◽

Key Factor ◽

Delay In Payments

This paper proposes a three-echelon inventory model with permissible delay in payments under controllable lead time and backorder consideration to find out the suitable inventory policy to enhance profit of the supply chain. In today’s highly competitive market, the supply chain management has become a critical issue in both practice and academic and supply chain members have to cooperate with each other to bring more benefits. In addition, the inventory policy is a key factor to influence the performance of the supply chain. Therefore, in this paper, we develop a three-echelon inventory model with permissible delay in payments under controllable lead time and backorder consideration. Furthermore, the purpose of this paper is to maximize the joint expect total profit on inventory model and attempt to discuss the inventory policy under different conditions. Finally, with a numerical example provided here to illustrate the solution procedure, we may discover that decision-makers can control lead time and payment time to enhance the performance of the supply chain.

Download Full-text