Title: Optimality of cycle time and inventory decisions in a coordinated and non-coordinated three-echelon supply chain under exponential price dependent demand

Authors: Burra Karuna Kumar; Dega Nagaraju; S. Narayanan

Addresses: Department of Mechanical Engineering, Gudlavalleru Engineering College, Gudlavalleru-521356, Andhra Pradesh, India ' Manufacturing Division, School of Mechanical and Building Sciences (SMBS), VIT University, Vellore-632014, Tamilnadu, India ' School of Mechanical and Building Sciences (SMBS), VIT University, Vellore-632014, Tamilnadu, India

Abstract: To remain competitive in the prevailing stiff business competition, coordination among the entities of the supply chain is becoming mandatory. The people in the supply chain have to integrate their business decisions beyond the organisation's boundary. This paper develops a mathematical model for a coordinated and non-coordinated three-echelon supply chain under exponential price-dependent demand. The model is developed with the consideration of ordering/setup, carrying and transportation costs. The objective of this work is to demonstrate the optimality of inventory replenishment decisions, shipment frequencies and the annual total variable costs, with and without coordination. A numerical illustration is presented to determine the optimal values of the objective function and decision variables. Further, the sensitivity analysis is carried out to study the influence of the model parameters on the optimality of decision variables and the objective function.

Keywords: supply chain management; SCM; exponential price dependent demand; inventory replenishment; shipment frequency; total variable cost; cycle time; inventory decisions; three-echelon supply chains; mathematical modelling; supply chain coordination.

DOI: 10.1504/IJLSM.2016.078913

International Journal of Logistics Systems and Management, 2016 Vol.25 No.2, pp.199 - 226

Received: 03 Jun 2015
Accepted: 16 Jul 2015
Published online: 05 Sep 2016 *

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