Queueing Inventory System in a Two-level Supply Chain with One-for-One Ordering Policy
Authors
Abstract:
Consider a two-level inventory system consisting of one supplier and one retailer. The retailer faces a Poisson demand with a known rate and applies base stock (one-for-one ordering) policy. That is, his inventory position is set to a pre-determined level, so the demand pattern is transferred exactly to the supplier. The supplier has an inventory system and a service unit with exponentially distributed service time to process the orders received from the retailer. Supplier also follows a base stock policy, and its lead time is exponentially distributed. When the supplier has some on-hand inventory, an arriving order from retailer joins the queue. But when the supplier has no on-hand inventory, the retailer does not accept any demand, i.e. the demand is lost. When the retailer has no on-hand inventory but the supplier has on-hand inventory, the arriving demand to the retailer will be backordered. For this system, we derive the steady state joint distributions of the ‘number of retailers order in service unit and the ‘on-hand inventory of the supplier’ and show that it has a product form. Furthermore, we derive the total expected system cost per unit time. After convexity analysis of the cost function, we derive the optimal inventory policy of supplier and retailer. Finally a numerical example is provided.
similar resources
A Queueing-Inventory System with Repair Center for Defective Items and One-for-One Ordering Policy
In this paper we consider a system consisting of a supplier with a single processing unit, a repair center, and a retailer with Poisson demand. We assume that the retailer applies one-for-one ordering policy with backorders for his inventory control. The retailer’s orders form a queue in the supplier processing unit. We also assume that a certain fraction of the products produced by the supplie...
full textCoordination and profit sharing in a two-level supply chain under periodic review inventory policy with delay in payments contract
In this paper,a coordination model has been investigated for a two-level supply chain (SC) consisting of one retailer and one supplier under periodic review inventory system. The review period and the retailer’s safety factorare assumed to be decision variables. The retailer faces stochastic demand following a normal distribution with known mean and variance. Moreover, it is assumed that unmet ...
full textOptimizing pricing and ordering strategies in a three-level supply chain under return policy
This paper develops an economic production quantity model in a three-echelon supply chain composing of a supplier, a manufacturer and a wholesaler under two scenarios. As the first scenario, we consider a return contract between the outside supplier and the supplier and also between the manufacturer and the wholesaler, but in the second one, the return policy between the manufacturer and the wh...
full textDetermination of a Desirable Inventory Policy in a three Echelon Multilayer Supply Chain with Normal Demand
Inventory control is one of the most important issues in supply chain management. In this paper, a three-echelon production, distribution, inventory system composed of one producer, a set of wholesalers and retailers is considered. Costumers' demands can be approximated by a normal distribution and the inventory policy is a kind of continuous review (R, Q). In this paper, a model based on stand...
full textA cost sharing-based coordination mechanism for multiple deteriorating items in a one manufacture-one retailer supply chain
In this paper, an inventory model for deterioration items in a two-echelon supply chain including one retailer and one manufacturer is proposed by considering the stock and price dependent demand and capacity constraint for holding inventories. First, the model is presented as a leader-follower game in which the manufacturer announces wholesale prices. Second, the retailer decides for the order...
full textMy Resources
Journal title
volume 5 issue 1
pages 52- 62
publication date 2011-04-01
By following a journal you will be notified via email when a new issue of this journal is published.
Hosted on Doprax cloud platform doprax.com
copyright © 2015-2023