IDEAS home Printed from https://ideas.repec.org/a/spr/opsear/v59y2022i4d10.1007_s12597-022-00600-5.html
   My bibliography  Save this article

Two-warehouse supply chain model under preservation technology and stochastic demand with shortages

Author

Listed:
  • Vandana

    (Indian Institute of Management)

  • A. K. Das

    (Indian Statistical Institute)

Abstract

This article develops an inventory model for deteriorating items with price-dependent stochastic demand. To maintain the freshness of the deteriorating items, preservation technology is being applied. Due to stochastic demand, retailers might face shortages considered partial backlogging. The retailer orders the items based on the forecasting of the stochastic demand, then keeps those items in their warehouse and the remaining items in a rented warehouse. This work aims to develop a suitable inventory model for finding the optimal selling price, cycle time when all items of the rented warehouse are sold, the replenishment cycle time, and the investment cost of preservation technology. We formulate the mathematical model with a solution procedure and provide the related theorems. We illustrate the concavity of the expected profit function using numerical examples. In conclusion, we discuss the implementation of the proposed model.

Suggested Citation

  • Vandana & A. K. Das, 2022. "Two-warehouse supply chain model under preservation technology and stochastic demand with shortages," OPSEARCH, Springer;Operational Research Society of India, vol. 59(4), pages 1587-1612, December.
    • Handle: RePEc:spr:opsear:v:59:y:2022:i:4:d:10.1007_s12597-022-00600-5
    DOI: 10.1007/s12597-022-00600-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12597-022-00600-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12597-022-00600-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Li, Guiping & He, Xiuli & Zhou, Jing & Wu, Hao, 2019. "Pricing, replenishment and preservation technology investment decisions for non-instantaneous deteriorating items," Omega, Elsevier, vol. 84(C), pages 114-126.
    2. Sudarshan Bardhan & Haimanti Pal & Bibhas Chandra Giri, 2019. "Optimal replenishment policy and preservation technology investment for a non-instantaneous deteriorating item with stock-dependent demand," Operational Research, Springer, vol. 19(2), pages 347-368, June.
    3. Chung-Yuan Dye & Chih-Te Yang & Chi-Chuan Wu, 2018. "Joint dynamic pricing and preservation technology investment for an integrated supply chain with reference price effects," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 69(6), pages 811-824, June.
    4. Lee, Chun Chen & Hsu, Shu-Lu, 2009. "A two-warehouse production model for deteriorating inventory items with time-dependent demands," European Journal of Operational Research, Elsevier, vol. 194(3), pages 700-710, May.
    5. Pasandideh, Seyed Hamid Reza & Niaki, Seyed Taghi Akhavan & Nobil, Amir Hossein & Cárdenas-Barrón, Leopoldo Eduardo, 2015. "A multiproduct single machine economic production quantity model for an imperfect production system under warehouse construction cost," International Journal of Production Economics, Elsevier, vol. 169(C), pages 203-214.
    6. Goyal, S. K. & Giri, B. C., 2001. "Recent trends in modeling of deteriorating inventory," European Journal of Operational Research, Elsevier, vol. 134(1), pages 1-16, October.
    7. Dye, Chung-Yuan & Hsieh, Tsu-Pang, 2012. "An optimal replenishment policy for deteriorating items with effective investment in preservation technology," European Journal of Operational Research, Elsevier, vol. 218(1), pages 106-112.
    8. Aditya Shastri & S.R. Singh & Dharmendra Yadav & Shalley Gupta, 2014. "Supply chain management for two-level trade credit financing with selling price dependent demand under the effect of preservation technology," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 7(6), pages 695-718.
    9. Xin Chen & David Simchi-Levi, 2004. "Coordinating Inventory Control and Pricing Strategies with Random Demand and Fixed Ordering Cost: The Infinite Horizon Case," Mathematics of Operations Research, INFORMS, vol. 29(3), pages 698-723, August.
    10. Pakkala, T. P. M. & Achary, K. K., 1992. "A deterministic inventory model for deteriorating items with two warehouses and finite replenishment rate," European Journal of Operational Research, Elsevier, vol. 57(1), pages 71-76, February.
    11. Hsu, P.H. & Wee, H.M. & Teng, H.M., 2010. "Preservation technology investment for deteriorating inventory," International Journal of Production Economics, Elsevier, vol. 124(2), pages 388-394, April.
    12. Tiwari, Sunil & Cárdenas-Barrón, Leopoldo Eduardo & Khanna, Aditi & Jaggi, Chandra K., 2016. "Impact of trade credit and inflation on retailer's ordering policies for non-instantaneous deteriorating items in a two-warehouse environment," International Journal of Production Economics, Elsevier, vol. 176(C), pages 154-169.
    13. Xin Chen & David Simchi-Levi, 2004. "Coordinating Inventory Control and Pricing Strategies with Random Demand and Fixed Ordering Cost: The Finite Horizon Case," Operations Research, INFORMS, vol. 52(6), pages 887-896, December.
    14. Dye, Chung-Yuan, 2013. "The effect of preservation technology investment on a non-instantaneous deteriorating inventory model," Omega, Elsevier, vol. 41(5), pages 872-880.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chaitanyakumar N. Rapolu & Deepa H. Kandpal, 2020. "Joint pricing, advertisement, preservation technology investment and inventory policies for non-instantaneous deteriorating items under trade credit," OPSEARCH, Springer;Operational Research Society of India, vol. 57(2), pages 274-300, June.
    2. Sebatjane, Makoena, 2022. "The impact of preservation technology investments on lot-sizing and shipment strategies in a three-echelon food supply chain involving growing and deteriorating items," Operations Research Perspectives, Elsevier, vol. 9(C).
    3. Li, Guiping & He, Xiuli & Zhou, Jing & Wu, Hao, 2019. "Pricing, replenishment and preservation technology investment decisions for non-instantaneous deteriorating items," Omega, Elsevier, vol. 84(C), pages 114-126.
    4. Reza Maihami & Behrooz Karimi & Seyyed Mohammad Taghi Fatemi Ghomi, 2017. "Effect of two-echelon trade credit on pricing-inventory policy of non-instantaneous deteriorating products with probabilistic demand and deterioration functions," Annals of Operations Research, Springer, vol. 257(1), pages 237-273, October.
    5. M. Palanivel & R. Uthayakumar, 2016. "Two-warehouse inventory model for non-instantaneous deteriorating items with partial backlogging and inflation over a finite time horizon," OPSEARCH, Springer;Operational Research Society of India, vol. 53(2), pages 278-302, June.
    6. Feng, Lin & Wang, Wan-Chih & Teng, Jinn-Tsair & Cárdenas-Barrón, Leopoldo Eduardo, 2022. "Pricing and lot-sizing decision for fresh goods when demand depends on unit price, displaying stocks and product age under generalized payments," European Journal of Operational Research, Elsevier, vol. 296(3), pages 940-952.
    7. Priyamvada & Prerna Gautam & Aditi Khanna, 2021. "Sustainable production strategies for deteriorating and imperfect quality items with an investment in preservation technology," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 12(5), pages 910-918, October.
    8. Sudarshan Bardhan & Haimanti Pal & Bibhas Chandra Giri, 2019. "Optimal replenishment policy and preservation technology investment for a non-instantaneous deteriorating item with stock-dependent demand," Operational Research, Springer, vol. 19(2), pages 347-368, June.
    9. Gudivada Durga Bhavani & Ieva Meidute-Kavaliauskiene & Ghanshaym S. Mahapatra & Renata Činčikaitė, 2022. "Pythagorean Fuzzy Storage Capacity with Controllable Carbon Emission Incorporating Green Technology Investment on a Two-Depository System," Energies, MDPI, vol. 15(23), pages 1-34, November.
    10. Umakanta Mishra & Leopoldo Eduardo Cárdenas-Barrón & Sunil Tiwari & Ali Akbar Shaikh & Gerardo Treviño-Garza, 2017. "An inventory model under price and stock dependent demand for controllable deterioration rate with shortages and preservation technology investment," Annals of Operations Research, Springer, vol. 254(1), pages 165-190, July.
    11. Gurkan, M. Edib & Tunc, Huseyin & Tarim, S. Armagan, 2022. "The joint stochastic lot sizing and pricing problem," Omega, Elsevier, vol. 108(C).
    12. Saha, Subrata & Chatterjee, Debajyoti & Sarkar, Biswajit, 2021. "The ramification of dynamic investment on the promotion and preservation technology for inventory management through a modified flower pollination algorithm," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).
    13. Li‐Ming Chen & Amar Sapra, 2013. "Joint inventory and pricing decisions for perishable products with two‐period lifetime," Naval Research Logistics (NRL), John Wiley & Sons, vol. 60(5), pages 343-366, August.
    14. Guowei Liu & Jianxiong Zhang & Wansheng Tang, 2015. "Joint dynamic pricing and investment strategy for perishable foods with price-quality dependent demand," Annals of Operations Research, Springer, vol. 226(1), pages 397-416, March.
    15. Beullens, Patrick & Ghiami, Yousef, 2022. "Waste reduction in the supply chain of a deteriorating food item – Impact of supply structure on retailer performance," European Journal of Operational Research, Elsevier, vol. 300(3), pages 1017-1034.
    16. Sandun C. Perera & Suresh P. Sethi, 2023. "A survey of stochastic inventory models with fixed costs: Optimality of (s, S) and (s, S)‐type policies—Discrete‐time case," Production and Operations Management, Production and Operations Management Society, vol. 32(1), pages 131-153, January.
    17. Dye, Chung-Yuan, 2013. "The effect of preservation technology investment on a non-instantaneous deteriorating inventory model," Omega, Elsevier, vol. 41(5), pages 872-880.
    18. Yu, Jonas C.P., 2019. "Optimizing a two-warehouse system under shortage backordering, trade credit, and decreasing rental conditions," International Journal of Production Economics, Elsevier, vol. 209(C), pages 147-155.
    19. Zhang, Jianxiong & Liu, Guowei & Zhang, Qiao & Bai, Zhenyu, 2015. "Coordinating a supply chain for deteriorating items with a revenue sharing and cooperative investment contract," Omega, Elsevier, vol. 56(C), pages 37-49.
    20. Abu Hashan Md Mashud & Dipa Roy & Yosef Daryanto & Mohd Helmi Ali, 2020. "A Sustainable Inventory Model with Imperfect Products, Deterioration, and Controllable Emissions," Mathematics, MDPI, vol. 8(11), pages 1-21, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:opsear:v:59:y:2022:i:4:d:10.1007_s12597-022-00600-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.