Optimality of cycle time and inventory decisions in a two echelon inventory system with exponential price dependent demand under credit period

摘要

This work describes and proposes an two echelon inventory system under supply chain, where the manufacturer offers credit period to the retailer with exponential price dependent demand. The model is framed as demand is expressed as exponential function of retailer's unit selling price. Mathematical model is framed to demonstrate the optimality of cycle time, retailer replenishment quantity, number of shipments, and total relevant cost of the supply chain. The major objective of the paper is to provide trade credit concept from the manufacturer to the retailer with exponential price dependent demand. The retailer would like to delay the payments of the manufacturer. At the first stage retailer and manufacturer expressions are expressed with the functions of ordering cost, carrying cost, transportation cost. In second stage combining of the manufacturer and retailer expressions are expressed. A MATLAB program is written to derive the optimality of cycle time, retailer replenishment quantity, number of shipments, and total relevant cost of the supply chain. From the optimality criteria derived managerial insights can be made. From the research findings, it is evident that the total cost of the supply chain is decreased with the increase in credit period under exponential price dependent demand. To analyse the influence of the model parameters, parametric analysis is also done by taking with help of numerical example.