A Fuzzy EOQ Model for Deteriorating Items With Allowable Shortage and Inspection Under the Trade Credit

This chapter develops an economic order quantity model for deteriorating items with initial inspection, allowable shortage under the condition of permissible delay in payment by fuzzify the demand rate, deterioration rate and inspection parameter of non-defective parameter based on as triangular fuzzy numbers to fit the real word. The total fuzzy cost function has been defuzzified using signed distance and centroid method. Comparison between these two methods has also been discussed. The validity of the model has been established with the help of a hypothetical numerical example.

Stackcelberg Game Inventory Model With Progressive Permissible Delay of Payment Scheme

Supplier has many schemes to motivate retailer to buy more and of them one is a progressive permissible delay of payment. Instead of analyst from the retailer side alone, in this chapter, we develop the inventory model of supplier and retailer. In reality, some suppliers and retailers cannot have collaboration and they try to optimize their own decision so we develop a Stackelberg Game model. Two models are developed wherein the first model supplier acts as the leader and in the second model, the retailer acts a leader. Since the models are complex, a hybrid Genetic Algorithm (GA) and Particle Swarm Optimization (PSO) is developed to solve the model. A numerical analysis and sensitivity analysis are conducted to get management insights of the model. The results show that a Stackelberg Game model for progressive permissible delay of payment is sensitive in varies values of the first and second delay interest rate if supplier acts as a leader. The retailer gets less inventory cost when he acts as a leader compared to when vendor acts a leader at high interest rate of the first and second delay period.

Optimal Integrated Inventory Policy for Deteriorating Units Under Selling-Price-Dependent Demand When Holding Cost Is Capacity-Utilization Dependent

Conventional EOQ models always discussed profit maximization for one player at a time. But modern approach of supply chain suggests that growing and sustainable supply chain is possible only when benefits of all members of chain are protected. This chapter proposes an integrated model of supply chain where units in inventory are subjected to time dependent deterioration. Since demand is inversely proportional to selling price of the item, it is assumed selling price dependent. To make it more practical and feasible permissible delay on payments is offered only on purchase of a certain amount of quantity. This chapter helps to offer an algorithm to attain optimal number of orders, quantity, selling price and trade credit to maximize the joint profit of supply chain. Isolated profit of supply chain is compared with overall system profit. Results are validated by numerical examples and further sensitivity analyses of important parameters are discussed. Conclusion obtained from the chapter is useful to supply chains involved with FMCGs, Drugs, Fashion goods and home decor textile.

Optimal Policies for Items With Quadratic Demand and Time-Dependent Deterioration Under Two Echelon Trade Credits

In today's competitive and global business scenario there is always a race to boost demand of your product over others. This can be achieved by different means and allowing permissible delay in payments is one of them. Researchers have proposed number of inventory models with trade credit that actually help to understand effect of trade credit on total profit and overall demand. This paper proposes a two – echelon trade credit where retailer receives credit period from the manufacturer and offer it to end customers appropriately to raise demand. Proposed inventory model assumes quadratic demand and subjected to time dependent deterioration. Ordering cost is considered lot – size dependent whereas holding cost has been taken time dependent. In this model profit is maximized considering cycle time as a decision variable. Sensitivity analysis of crucial inventory parameters and numeric examples are discussed in detail. Outcome of this model can be applied to a huge range of products like readymade garments, fashion accessories, electronics, furniture and home furnishing products.

Optimal Strategies for Deteriorating Inventory Systems Under Trapezoidal Type Demand

In this chapter, we study different inventory systems with trapezoidal demand rate, i.e., demand rate is a piecewise linear and continuous function. This chapter presents mathematical formulations of optimal replenishment policies for items with trapezoidal demand rate. Section 1 presents detailed literature survey for inventory systems with ramp type and trapezoidal type demand. In Section 2, Formulation technique for inventory system of items, which follows trapezoidal type demand rate. Section 3 presents effect of deterioration in model discussed in Section 2. Optimal strategy for deteriorating items with expiration dates under trapezoidal type demand and partial backlogging is discussed in Section 4. In Section 5, sensitivity analysis is carried out and chapter is concluded along with future research scope in Section 6.

Revisiting Dynamic Potential Adopter Diffusion Models under the Influence of Irregular Fluctuations in Adoption Rate

A pragmatic innovation diffusion model is proposed in the present chapter that interpolates stochasticity in the logistic formulation of the widely-acknowledged Bass model with dynamic market size. These irregular changes are caused due to uncertainty attached to the socioeconomic and political environment in which an innovation is positioned that affects the action of potential adopters leading to their non-uniform behavior. The aim of the current study is to find the analytical solution for the two dynamic market expansion structures, namely, linear and exponential under the influence of irregular fluctuations whose closed-form solutions were not possible in the existing literature. In addition to the changeable market size, the proposed innovation diffusion also incorporates the concept of repeat purchase. The anticipated stochastic differential equation based new product diffusion model is then expounded methodically using the Itô process and Itô's integral equation. Further, the model has been used to study the growth pattern of different consumer durable products.

Genetic Algorithm Approach for Inventory and Supply Chain Management

Inventory and supply chain management is a real concern for business community in today's globally competitive scenario. Various inventory models are proposed, significant parameters are analysed and finally optimized by researchers in order to give managers an insight for the different parameters. Mathematical and logical analysis of different inventory and supply chain models helps mangers in overall cost reduction and further higher revenue generation. Members often encounter conflicting interest and unforeseen scenario. So, all this make supply chain very complex and dynamic process. Complex and uncertain nature of inventory and supply chain, many times either it is not feasible to solve the issue with traditional methods or it is not cost effective. Thus many researchers are using artificial intelligence approach for investigation. Genetic algorithm is one among them that works efficiently with complex nature of the inventory and supply chain management. This article provides an up to date review about the role of GA in overall inventory and supply chain management.

Optimal Ordering Policy With Inventory Classification Using Data Mining Techniques

Data mining is a technique to identify valid novel, potentially useful, and understandable correlations and patterns in existing data. Data mining techniques, such as clustering, association rule mining, classification, and sequential pattern mining, have attracted a great deal of attention in the information industry and in society as a whole in recent years. Some research studies have also extended the usage of this concept in inventory management. Yet, not many research studies have considered the application of data mining approach on determining both optimal order quantity and loss profit of frequent items. This helps inventory manager to determine optimum order quantity of frequent items together with the most profitable item for optimal inventory control. In this chapter, two different cases for determining ordering policy and inventory classification based on loss rule are presented. An example is illustrated to validate the results.

Non-Cooperative Game Theoretic Approach in Supply Chain With Imperfect Quality Items and Credit Financing

This paper considers a supply chain model for imperfect quality items in which retail price of the buyer influences the demand of the product. The seller offers fix credit period for the buyer to stimulate his sales. Each delivered lot, goes through an inspection process at the buyer's end. After the inspection, items are separated into two parts, one is perfect quality items and another is imperfect quality items. The perfect quality items are sold at selling price and the imperfect items are sold at a discounted price immediately after the inspection process. The credit period offered by the seller and the selling price of the seller, both are considered as a decision variable. Relationship between seller and buyer is derived from the non-cooperative Seller- Stackelberg game approach. Optimal selling price, credit period and order quantity are determined by maximizing expected total profit of the supply chain. At the end, numerical examples with sensitivity analysis are given to explain the theory of the paper.

Credit Policies for Deteriorating Imperfect Quality Items With Exponentially Increasing Demand and Partial Backlogging

In retail industries every ordered lot carry some fraction of imperfect quality items which can vary depending upon production and handling conditions. The situation is even more subtle when the items are prone to deterioration. However, an inspection process can spare us from such a criticality by bifurcating the defectives from the good quality lot. Thus, a screening process is mandatory. In the hyper-competitive market, trade-credit is well-known gimmick in order to boost the sales. Keeping in view, an inventory scenario of a retailer is investigated who has to deal with imperfect and “deteriorating items” under “permissible delay in payments”. The demand is assumed to be increasing exponentially. Shortages are permitted to occur and supposed to be “partially backlogged.” Rate of backlogging is assumed to have inverse relation with the waiting time for the subsequent replenishment. In this chapter, shortage point and length of cycle are jointly optimized. Numerical analysis and sensitivity analysis is performed to provide important insights for managerial persistence.