Design and development of a model and optimal planning for supply chain responsibility towards the environment

The responsible management of product return flows in production and inventory environments is a rapidly increasing requirement for companies. This can be attributed to economic, environmental and/or regulatory motivations. Mathematical modeling of such systems has assisted decision-making processes and provided a better understanding of the behavior of such production and inventory environments. This paper reviews the literature on the modeling of reverse logistics inventory systems based on the economic order/production quantity (EOQ/EPQ) and the joint economic lot size (JELS) settings to systematically analyze the mathematics involved in capturing the main characteristics of related processes. The literature is surveyed and classified according to the specific issues faced and modeling assumptions. Special attention is given to environmental issues. There are indications of the need for reverse logistics models' mathematics to follow current trends in ‘greening’ inventory and supply-chain models. The modeling of waste disposal, greenhouse-gas emissions, and energy consumption during production is considered as the most pressing priority for the future of reverse logistics models. An illustrative example for modeling reverse logistics inventory models with environmental implications is presented.

Improving Supply Chain Profit through Reverse Factoring: A New Multi-Suppliers Single-Vendor Joint Economic Lot Size Model

Supply chain finance has been gaining attention in theory and practice. A company’s financial position affects its performance and survivability in dynamic and volatile markets. Those that have weak financial performance are vulnerable when operating in environments that are uncertain and financially unstable. Companies adopt various solutions and techniques to manage, effectively and efficiently, the flow of money to and from its suppliers and buyers. Reverse factoring is an innovative technique in supply chain financing. This paper develops a joint economic lot size model where a vendor coordinates operational and financial decisions with its multiple suppliers through the establishment of a reverse factoring arrangement. The creditworthy vendor systematically informs a financial institution (e.g., bank) of payment obligations to selected suppliers, enabling the latter to borrow against the value of the relevant accounts receivable at low interest (borrowing) rates. The paper also presents a numerical example and a sensitivity analysis to illustrate the behavior of the model and to compare the economic and operational performance of a supply chain with and without a reverse factoring agreement. The results show that the establishment of a reverse factoring agreement within the supply chain improves the economic performance and impacts on the operational decisions.

Pengendalian Persediaan Produk Obat Herbal pada Permintaan Probabilistik Menggunakan Joint Economic Lot Size

Integration in supply chain is an important factor to consider. Good integration between entity in supply chain can give some advantages from minimize cost to competitiveness between supply chain. Company X is manufacturer of herbs medicine which has single distributor to sell the product. Currently, manufacturer and distributor have their inventory control policies and there is no coordination among echelon. It causes the difference number of production lot from manufacturer and the number of order from distributor, consequently total inventory cost become expensive.This research will propose Joint Economic Lot Size (JELS) method that can integrate these two echelons and will give the minimum total inventory cost. The proposed JELS method is integration between Cardenas-Barron model about EPQ backorder and Ben-Daya and Hariga model about integration model between single supplier and single consumer. Calculation process begin with forecasting demand, calculation of actual inventory control at echelon manufacturer and distributor, and calculation of proposed method. The result of calculation process show that total actual inventory cost is 5.500.371,476 IDR/month and the proposed method give 4.604.766,665 IDR/month. The proposed method can give saving about 895.604,811 IDR/month or 16,28%. Key words: cost, integration, JELS, inventory