A DETERIORATING INVENTORY MODEL WITH LIMITED VEHICLE CAPACITY, STOCK DEPENDENT DEMAND AND UNAVAILABILITY SUPPLY

Inventory model is one research topic that has been given attention intensively in the
supply chain. There are two main costs for inventory, which are transport cost and
inventory cost. Therefore, some buyers would like to apply a Vendor Managed
Inventory (VMI) system where vendors handle the transportation and manage stocks
at the buyer’s hand. The problem is complex for some items, such as fruits and
vegetables, in which the items deteriorate. The need for fruits and vegetables tends
to be higher as the stock is high. Deteriorating inventory models have been
developed in many years, however, only a few models considering vehicle capacity,
carbon emission, deteriorating items, stock dependent demand, and unavailability
supply. In this study, a deteriorating inventory model for multi items in one
distribution with stock dependent demand is improved. On the other hand, fruits and
vegetable stock are not consistently available, so lost sales costs should be
examined. Environmental issues have been studied by many researchers. Therefore,
we further consider the carbon emission yield in this model. Since the closed-loop
solution can not be obtained, we employ a simple heuristic solution in Maple. A
sensitivity analysis is employed to obtain some management insight. The sensitivity
analysis indicates that the carbon emission tax rate can encourage decision-makers
to increase order quantity and reduce carbon emission, but the policy should deal
with many features that are recognized by decision-makers to make it useful