A two-echelon inventory model for a deteriorating item with stock-dependent demand, partial backlogging and capacity constraints

Y. Ghiami, Terry Williams, Yue Wu

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

This study investigates a two-echelon supply chain model for deteriorating inventory in which the retailer’s warehouse has a limited capacity. The system includes one wholesaler and one retailer and aims to minimise the total cost. The demand rate in retailer is stock-dependent and in case of any shortages, the demand is partially backlogged. The warehouse capacity in the retailer (OW) is limited; therefore the retailer can rent a warehouse (RW) if needed with a higher cost compared to OW. The optimisation is done from both the wholesaler’s and retailer’s perspectives simultaneously. In order to solve the problem a genetic algorithm is devised. After developing a heuristic a numerical example together with sensitivity analysis are presented. Finally, some recommendations for future research are presented.
LanguageEnglish
Pages587-597
JournalEuropean Journal of Operational Research
Volume231
Issue number3
DOIs
Publication statusPublished - 2013

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Stock-dependent Demand
Partial Backlogging
Deteriorating Items
Capacity Constraints
Inventory Model
Warehouses
Costs
Shortage
Supply Chain
Sensitivity Analysis
Recommendations
Genetic Algorithm
Heuristics
Minimise
Numerical Examples
Supply chains
Sensitivity analysis
Optimization
Dependent
Genetic algorithms

Cite this

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A two-echelon inventory model for a deteriorating item with stock-dependent demand, partial backlogging and capacity constraints. / Ghiami, Y.; Williams, Terry; Wu, Yue.

In: European Journal of Operational Research, Vol. 231, No. 3, 2013, p. 587-597.

Research output: Contribution to JournalArticleAcademicpeer-review

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