Behavioral operations effect of fairness and unfairness concern in the decision of the supply chain production-inventory system

Purpose The purpose of this paper is to investigate the behavioral operations effect in production inventory decision of supply chain consisting of one manufacturer and one buyer, and analyze how the unfairness concerns impact the decision of production inventory in a supply chain system. Design/methodology/approach First, a model without the buyer’s unfairness concern is established; then, advantage unfairness concern and disadvantage unfairness concern behavior of buyer are taken into account in the production inventory system. The authors analyze how advantage unfairness concern and disadvantage unfairness concern impact the optimal decisions and channel coordination. Findings The result shows several important conclusions. First, the buyer’s optimal ordering quantity and expected utility show opposing trend when the buyer has advantage unfairness concern. Second, the stronger bargaining power of the manufacturer results in an increasing buyer’s optimal ordering quantity under the advantage unfairness concern case, but decreasing under the disadvantage unfairness concern case. Third, the supply chain production-inventory can be coordinated under advantage unfairness concern case, but cannot be coordinated under disadvantage unfairness concern. Practical implications The study can provide to practitioners with important implications that when the vendor or the buyer in supply chain wants to make the decision of inventory replenishment, taking unfairness concerns into account will lead to different results. Therefore, to effectively improve the operations performance of supply chain, partners of the supply chain should not only care about their own interest, but also need to consider the fairness concern of the other partner, reflecting the cooperation consciousness of supply chain management. Originality/value This paper contributes to the new field of creative management–behavioral operations, offering managerial implications for the decision and optimization of supply chain production-inventory problem.

COMPARATIVE ANALYSIS OF INVENTORY MANAGEMENT METHODS IN CASE OF UNEVEN DEMAND

Введение. Статья является продолжением исследования авторов, посвященного сравнению наиболее известных и распространенных методов управления запасами. В настоящей статье представлены результаты расчетов числового примера по ряду алгоритмов, приведен сравнительный анализ полученных данных, сформулированы рекомендации по использованию рассмотренных методов на практике, при условии соответствия допущениям, заложенным в приведенных расчетах. Данные и методы. В статье проведены расчеты общих затрат на поддержание запасов такими методами, как алгоритм Вагнера-Уайтина (Wagner-Whiting algorithm), эвристический метод Гроффа (Groff`s Rule), метод баланса затрат (Part Period Balancing, PPB), метод периодического размера заказа (Periodic Ordering Quantity, POQ). Результаты указанных расчетов объединены с полученными ранее в предыдущей публикации по данной проблематике. Сравнение полученных результатов позволило выделить на основе ранжирования наиболее оптимальные методы управления запасами в условиях сделанных допущений. Полученные результаты. Авторами сформулированы выводы относительно применения рассмотренных методов управления запасами на практике. Исходя из соотнесения отдельных элементов общих затрат на поддержание запасов даны соответствующие рекомендации. Выделены проблемы при определении размеров оптимальных партий пополнения запасов в случаях, когда на практике реальные условия (переменные модели) будут существенно отличаться от условий рассмотренного числового примера. Заключение. Результаты представленной публикации могут быть использованы на практике хозяйствующими субъектами, деятельность которых связана с созданием и поддержанием значительных объемов запасов, в целях оптимизации партий их поставок по критерию минимума общих затрат на хранение и пополнение Introduction. The article is a continuation of the authors ' research on the comparison of the most well-known and common methods of inventory management. This article presents the results of numerical calculations of example, a number of algorithms, a comparative analysis of the data obtained, recommendations for using the methods in practice, provided that the assumptions used in the calculations. Data and methods. The article calculates the total cost of maintaining inventory using such methods as the Wagner-Whiting algorithm, the Groff's Rule heuristic method, the Part Period Balancing (PPB) method, and the Periodic Ordering Quantity (POQ) method. The results of these calculations are combined with those obtained earlier in the previous publication on this issue. A comparison of the results obtained allowed us to identify, on the basis of ranking, the most optimal methods of inventory management, under the conditions of the assumptions made. The received results. The authors draw conclusions about the application of the considered methods of inventory management in practice. Based on the correlation of individual elements of the total cost of maintaining stocks, appropriate recommendations are given. Problems are identified in determining the size of optimal replenishment batches in cases where in practice the real conditions (model variables) will differ significantly from the conditions of the considered numerical example. Conclusion. The results of the presented publication can be used in practice by economic entities whose activities are associated with the creation and maintenance of significant volumes of stocks, in order to optimize the batches of their supplies according to the criterion of the minimum total cost of storage and replenishment.

Sustainable optimal ordering quantity for non-instantaneous deteriorating items under joint replenishment with substitution and carbon emission

Purpose Carbon emission is a significant issue for the current business market and global warming. Nowadays, most countries have focused to reduce the environmental impact of business with durable financial benefits. The purpose of this study is to optimize the entire cost functions with carbon emission and to find the sustainable optimal ordering quantity for retailers. Design/methodology/approach This paper illustrates a sustainable inventory model having a set of two non-instantaneous substitutable deteriorating items under joint replenishment with carbon emission. In this model demand and deterioration rate are considered as deterministic, constant and triangular fuzzy numbers. The objective is to find the optimal ordering quantity for retailers and to minimize the total cost function per unit time with carbon emission. The model is then solved with the help of Maple software. Findings This paper presents a solution method and also develop an algorithm to determine the order quantities which optimize the total cost function. A numerical experiment illustrates the improvement in optimal total cost of the inventory model with substitution over without substitution. The graphical results show the convexity of the cost function. Finally, sensitivity analysis is given to get the impact of parameters and validity of the model. Originality/value This study considers a set of two non-instantaneous substitutable deteriorating items under joint replenishment with carbon emission. From the literature review, in the authors’ knowledge no researcher has undergone this kind of study.

An EOQ model with stepwise ordering cost and the finite planning horizon under carbon cap-and-trade regulations

In this study, under the carbon cap-and-trade mechanism, the ordering cost presents a stepwise function for ordering quantity, and the optimal economic ordering quantity model aims to explore the manufacturer's total cost minimization in the finite planning horizon, in combination with the actual situation that the product will produce carbon emissions during transportation and storage. The economic order quantity (EOQ) model with stepwise ordering cost is applicable to the decision environment in which goods are utilized by sea, by rail or by air (e.g., the order cost is charged in addition to the basic fixed cost, the importer of raw materials will pay an additional freight related to delivery, such as the rent for the use of container numbers.). A heuristic algorithm is also proposed to analyze the relevant properties of the optimal solution of the model and to solve the optimal order times and quantities of the manufacturer under the constraint of carbon policy.We further compared the optimal order times with the case without carbon constraint and the order times corresponding to the manufacturer's realization of the minimum carbon emission, and obtained the conditions for the manufacturer to achieve low cost and low emission under the carbon policy.Finally, the theoretical results of the model are verified by numerical examples,and the influence of relevant parameters on the inventory strategy of manufacturers is discussed. The results show that under the carbon cap-and-trade policy, there is an optimal ordering strategy that minimizes the total cost of the manufacturer in the finite horizon. When the demand of the manufacturer is under finite horizon and the carbon policy is equal to the specific multiplier of orders, the manufacturer can achieve a win-win result of low cost and low emissions.

An inventory system for varying decaying medicinal products in healthcare trade

This paper introduces an inventory system for declining medicinal products under the effect of ination with price-sensitive demand. Usually, pharmaceutical inventory systems assume the deteriorating rate as constant, which is insignificant and illogical because healthcare products medicines and drugs deteriorate significantly. Thus, the deteriorating rate of medicinal products is supposed to be time-dependent and to follow three-parameter Weibull distribution. The lack of commodities is permitted with the rate of partial backlogging. This research work develops a model to optimize the total average cost of the items by calculating the ordering quantity and the optimum time intervals. Finally, through a numerical example, with sensitivity analysis, we demonstrate the effect of different parameters.

Novel Solution Method for Inventory Models with Stochastic Demand and Defective Units

This paper is a response to two papers. We improve the lengthy proof for the first paper by an elegant verification. For the second paper, we point out the three-sequence approach will result in different convergent rates such that when the other two sequences are converged, the ordering quantity sequence may still not converge to the optimal solution. We construct a novel iterative method to simplify the previous approach proposed by the three-sequence approach for the optimal solution. By the same numerical examples of three published papers, we demonstrate that we can control our findings to converge more accurately than previous results. Moreover, we show that there are three distinct features of our proposed approach. (i) It converges to the desired solution within the preassigned threshold value. (ii) We estimate the convergent ratio. (iii) We find the dominant factors for our proposed convergent sequence.

PERISHABLE INVENTORY MODEL WITH FINITE RATE OF REPLENISHMENT HAVING GENERALIZED PARETO DECAY

In this paper an EPQ model for deteriorating items is developed and analyzed an inventory model for deteriorating items with the assumptions that the lifetime of the community is random and follows a Generalized Pareto distribution, having constant demand rate with shortages. The total cycle length in this model is divided into our non-over lapping intervals depending on the decrease of stock. Assuming that shortages are allowed and fully back backlogged, the differential equations governing the instantaneous state of inventory are developed and solved for I(t). The loss due to deterioration, the total backlogged demand, the ordering quantity is also derived with suitable cost consideration. The total profit per unit time is developed and optimized with respect to the time at which production is to be started, time at which shortages occur, the time at which production is to be restated. The optimal ordering quantity, Q is also obtained for given values of the parameters. A numerical illustration is presented. This model also includes some of the earlier models as particular cases for specific values of the parameters. KEYWORDS: Random Replenishment; Generalized Pareto Decay; Constant Demand; Shortages.

Economic Ordering Policy for VAR Deterioration Model with Non-stationary Two-warehouse Inventory and Demand

This paper adopts the two-warehouse inventory, determination on the first run-time and VAR (Vector Auto Regression) deterioration model. The optimal EOQ in the interval of the finite horizon is determined under critical considerations. The non-stationary two-warehouse inventory, i.e. the inventory and initial inventory are non-stationary at level, but stationary after lag difference similar to demand (demand and initial demand). The output of the proposed model represented the optimal order quantity and optimal first run-time, the optimal total cost as integration of first order with the significant trend and intercept. The optimal demand is decreased during more risk as a deterioration variable to reduce the quantity in the stock. The initial demand is stationary after a first lag and the demand is stationary.Keywords: initial inventory; optimal of first run-time; EOQ (Economic Ordering Quantity); total cost function (TC). AbstrakPenelitian ini mengadopsi inventori dengan dua gudang penyimpanan, penentuan pada waktu run (run-time) awal, dan model deteriorating VAR (Vector Auto Regression). Nilai optimal EOQ dalam interval horizon berhingga ditentukan dengan pertimbangan kritis. Inventori dengan dua gedung yang tidak stasioner, yaitu inventori dan inventori awal tidak stasioner pada level, tetapi stasioner setelah perbedaan lag seperti halnya pada permintaan (permintaan dan permintaan awal). Hasil dari model yang diajukan menunjukkan nilai orde yang optimal dan waktu run awal yang optimal, total biaya optimal sebagai integrasi dari orde pertama dengan tren dan intercept yang signifikan. Permintaan optimal mengalami penurunan ketika lebih banyak risiko sebagai variabel deteroriating untuk mengurangi jumlah dalam stok. Permintaan awal menunjukkan stasioner setelah perbedaan lag pertama dan permintaan juga stasioner.Kata kunci: inventori awal; optimal run-time awal; EOQ (Economic Ordering Quantity); fungsi biaya total.