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

Ghiami, Yousef; Williams, Terry; Wu, Yue

Authors

Yousef Ghiami

Yue Wu



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. © 2013 Elsevier B.V. All rights reserved.

Citation

Ghiami, Y., Williams, T., & Wu, Y. (2013). A two-echelon inventory model for a deteriorating item with stock-dependent demand, partial backlogging and capacity constraints. European journal of operational research, 231(3), 587-597. https://doi.org/10.1016/j.ejor.2013.06.015

Journal Article Type Article
Acceptance Date Jun 9, 2013
Online Publication Date Jun 20, 2013
Publication Date Dec 16, 2013
Deposit Date Apr 1, 2022
Journal European Journal of Operational Research
Print ISSN 0377-2217
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 231
Issue 3
Pages 587-597
DOI https://doi.org/10.1016/j.ejor.2013.06.015
Public URL https://hull-repository.worktribe.com/output/3634099