A Deteriorating Inventory Model with Limited Vehicle Capacity, Stock Dependent Demand and Unavailability Supply

Widyadana, I Gede Agus and Sutapa, I Nyoman (2019) A Deteriorating Inventory Model with Limited Vehicle Capacity, Stock Dependent Demand and Unavailability Supply. In: The 9th International Conference on Operations and Supply Chain Management, 18-12-2019 - 18-12-2019, Ho Chi Minh City - Vietnam.

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Abstract

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

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