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

Ghiami, Yousef; Williams, Terry; Wu, Yue

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