Optimal Inventory Policies for Weibull Deterioration under Trade Credit in Declining Market

The aim of this study is to develop mathematical model for Weibull deterioration of items in inventory in declining market when the supplier offers his retailers a credit period to settle the accounts against the dues. The computational steps are explored for a retailer to determine the optimal purchase units which minimize the total inventory cost per time unit. The numerical examples are given to demonstrate the retailer’s optimal decision. A sensitivity analysis is carried out to study the variations in the optimal solution.Weibull deterioration, trade credit, declining market

Coordinating a two-echelon supply chain under inflation and time value of money

In the current global economic scenario, inflation plays a vital role in deciding optimal pricing of goods in any business entity. This paper develops a two-echelon (manufacturer-buyer) supply chain model taking into account inflation and time value of money. The present value of the total cost of the supply chain is derived when the manufacturer produces a number of lots, the sum of which is equal to the buyer’s total demand over a time horizon and the manufacturer’s each production lot is delivered to the buyer in n shipments. The optimal solution of the model is obtained for a numerical example after some adjustments (required to exhibit feasibility) in the derived solution. Sensitivity analysis is also carried out in order to examine the effects of changes in model-parameters on the optimal solution

A Two-Warehouse Model for Deteriorating Items with Holding Cost under Particle Swarm Optimization

A deterministic inventory model has been developed for deteriorating items and Particle Swarm Optimization (PSO) having a ramp type demands with the effects of inflation with two-warehouse facilities. The owned warehouse (OW) has a fixed capacity of W units; the rented warehouse (RW) has unlimited capacity. Here, we assumed that the inventory holding cost in RW is higher than those in OW. Shortages in inventory are allowed and partially backlogged and Particle Swarm Optimization (PSO) it is assumed that the inventory deteriorates over time at a variable deterioration rate. The effect of inflation has also been considered for various costs associated with the inventory system and Particle Swarm Optimization (PSO). Numerical example is also used to study the behaviour of the model. Cost minimization technique is used to get the expressions for total cost and other parameters

Supply chain finance for ameliorating and deteriorating products: a systematic literature review

Ameliorating and deteriorating products, or, more generally, items that change value over time, present a high sensitiveness to the surrounding environment (e.g., temperature, humidity, and light intensity). For this reason, they should be properly stored along the supply chain to guarantee the desired quality to the consumers. Specifically, ameliorating items face an increase in value if there are stored for longer periods, which can lead to higher selling price. At the same time, the costumers’ demand is sensitive to the price (i.e., the higher the selling price the lower the final demand), sensitiveness that is related to the quality of the products (i.e., lower sensitiveness for high-quality products). On the contrary, deteriorating items lose quality and value over time which result in revenue losses due to lost sales or reduced selling price. Since these products need to be properly stored (i.e., usually in temperature- and humidity-controlled warehouses) the holding costs, which comprise also the energy costs, may be particularly relevant impacting on the economic, environmental, and social sustainability of the supply chain. Furthermore, due to the recent economic crisis, companies (especially, small and medium enterprises) face payment difficulties of customers and high volatility of resources prices. This increases the risk of insolvency and on the other hand the financing needs. In this context, supply chain finance emerged as a mean for efficiency by coordinating the financial flow and providing a set of financial schemes aiming at optimizing accounts payable and receivable along the supply chain. The aim of the present study is thus to investigate through a systematic literature review the two main themes presented (i.e., inventory management models for products that change value over time, and financial techniques and strategies to support companies in inventory management) to understand if any financial technique has been studied for supporting the management of this class of products and to verify the existing literature gap

Production inventory policy under a discounted cash flow

This paper presents an extended production inventory model in which the production rate at any instant depends on the demand and the inventory level. The effects of the time value of money are incorporated into the model. The demand rate is a linear function of time for the scheduling period. The proposed model can assist managers in economically controlling production systems under the condition of considering a discounted cash flow. A simple algorithm computing the optimal production-scheduling period is developed. Several particular cases of the model are briefly discussed. Through numerical example, sensitive analyses are carried out to examine the effect of the parameters. Results show that the discount rate parameter and the inventory holding cost have a significant impact on the proposed model

An Epq Model Having Weibull Distribution Deterioration With Exponential Demand and Production With Shortages Under Permissible Delay In Payments

In the fundamental production inventory model, in order to solve the economic production quantity (EPQ) we always fix both the demand quantity and the production quantity per day. But, in the real situation, production is usually dependend on demand. This paper derives a production model for the lot-size inventory system with finite production rate, taking into consideration the effect of decay and the condition of permissible delay in payments. Usually no interest is  charged  if the outstanding amount is settled within the permitted fixed settlement period. Therefore, it makes economic sense for the customer to delay the settlement of the replenishment account up to the last moment of the permissible period allowed by the supplier. In this model shortages are permitted and fully backordered . The purpose of this paper is to investigate a computing schema for the EPQ. The model is illustrated with a numerical example. Keywords Economic production quantity, permissible delay, weibull distribution, deterioration

Sustainable Inventory Management Model for High-Volume Material with Limited Storage Space under Stochastic Demand and Supply

Inventory management and control has become an important management function, which is vital in ensuring the efficiency and profitability of a company’s operations. Hence, several research studies attempted to develop models to be used to minimise the quantities of excess inventory, in order to reduce their associated costs without compromising both operational efficiency and customers’ needs. The Economic Order Quantity (EOQ) model is one of the most used of these models; however, this model has a number of limiting assumptions, which led to the development of a number of extensions for this model to increase its applicability to the modern-day business environment. Therefore, in this research study, a sustainable inventory management model is developed based on the EOQ concept to optimise the ordering and storage of large-volume inventory, which deteriorates over time, with limited storage space, such as steel, under stochastic demand, supply and backorders. Two control systems were developed and tested in this research study in order to select the most robust system: an open-loop system, based on direct control through which five different time series for each stochastic variable were generated, before an attempt to optimise the average profit was conducted; and a closed-loop system, which uses a neural network, depicting the different business and economic conditions associated with the steel manufacturing industry, to generate the optimal control parameters for each week across the entire planning horizon. A sensitivity analysis proved that the closed-loop neural network control system was more accurate in depicting real-life business conditions, and more robust in optimising the inventory management process for a large-volume, deteriorating item. Moreover, due to its advantages over other techniques, a meta-heuristic Particle Swarm Optimisation (PSO) algorithm was used to solve this model. This model is implemented throughout the research in the case of a steel manufacturing factory under different operational and extreme economic scenarios. As a result of the case study, the developed model proved its robustness and accuracy in managing the inventory of such a unique industry

Low Carbon Economic Production Quantity Model for Imperfect Quality Deteriorating Items

This paper presents an economic production quantity (EPQ) model for deteriorating items with a certain percentage of defective products due to an imperfect process. The defective products are sold to a secondary market at a discount price. Due to environmental concern and carbon tax regulation, the manufacturer incorporates the control of carbon emission cost into its decision model. Carbon emission cost is a function of electricity consumption during production and inventory storage; it is also dependent on the carbon tax rate. Since the production process results in work-in-process inventory and carbon emission, the study tries to optimize the throughput time. We also examine the effect of carbon tax regulation on the potential emission reduction from the developed deteriorating item model. A numerical example and sensitivity analysis have been provided, and the result confirms the influence of carbon tax regulation in reducing carbon emission

TIME Value Of Money dalam Perspektif Hukum Islam

This article reveals the Islamic view of the concept of Time Value of Money (referred by economists as positive time preference). This concept states that the value of commodities at present is higher than in the future. Time Value of Money is closely linked to the ‘discount\u27 concept that exists in capital and investment theory and, in practice, is used as a tool for project evaluation as well as investment decisions. This study concludes that Islam is not familiar with the concept of Time value of money. Islam only recognizes the concept of economic value of time. In Islamic view, money is simply a means of exchange, not a commodity. Similarly, the motive for money demand is to meet the needs of transaction, not for speculation