Supply Chain Model with Stochastic Lead Time, Trade-Credit Financing, and Transportation Discounts

Sung Jun Kim, Biswajit Sarkar

Research output: Contribution to journalArticle

14 Citations (Scopus)

Abstract

This model extends a two-echelon supply chain model by considering the trade-credit policy, transportations discount to make a coordination mechanism between transportation discounts, trade-credit financing, number of shipments, quality improvement of products, and reduced setup cost in such a way that the total cost of the whole system can be reduced, where the supplier offers trade-credit-period to the buyer. For buyer, the backorder rate is considered as variable. There are two investments to reduce setup cost and to improve quality of products. The model assumes lead time-dependent backorder rate, where the lead time is stochastic in nature. By using the trade-credit policy, the model gives how the credit-period would be determined to achieve the win-win outcome. An iterative algorithm is designed to obtain the global optimum results. Numerical example and sensitivity analysis are given to illustrate the model.

Original languageEnglish
Article number6465912
JournalMathematical Problems in Engineering
Volume2017
DOIs
Publication statusPublished - 2017 Jan 1

Fingerprint

Trade Credit
Discount
Supply Chain
Supply chains
Backorder
Setup Cost
Costs
Model
Quality Improvement
Global Optimum
Iterative Algorithm
Sensitivity analysis
Sensitivity Analysis
Numerical analysis
Numerical Examples
Dependent

All Science Journal Classification (ASJC) codes

  • Mathematics(all)
  • Engineering(all)

Cite this

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Supply Chain Model with Stochastic Lead Time, Trade-Credit Financing, and Transportation Discounts. / Kim, Sung Jun; Sarkar, Biswajit.

In: Mathematical Problems in Engineering, Vol. 2017, 6465912, 01.01.2017.

Research output: Contribution to journalArticle

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