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October  2008, 4(4): 827-842. doi: 10.3934/jimo.2008.4.827

Supply chain partnership for Three-Echelon deteriorating inventory model

Jonas C. P. Yu 1, , H. M. Wee 2, and  K. J. Wang 3,

1. 

Logistics Management Department, Takming University of Science and Technology, Taipei 114, Taiwan, ROC, China
2. 

Department of Industrial & Systems Engineering Chung Yuan Christian University, Chungli, 32023, Taiwan, ROC, Graduate School of Business, Curtin University of Technology, Perth WA 6845, Australia
3. 

Department of Industrial Management, National Taiwan University of Science and Technology, Taipei 106, Taiwan, ROC, Taiwan

Received  January 2007 Revised  August 2008 Published  November 2008

The different facilities in a supply chain usually develop their partnership through information sharing and strategic alliances to achieve the overall benefit of the system. In this study, we propose a supply chain network system with two producers, a single distributor and two retailers. Each retailer has a deterministic demand rate. A mathematical model of deteriorating item is developed to consider a vertical integration of the producer, the distributor and the retailer and a horizontal integration of the producers. We show how the integrated approach to decision making can achieve global optimum. Numerical examples and a sensitivity analysis are given to validate the proposed system.
Keywords: Inventory, Deteriorating item, Integration., Three-echelon.
Mathematics Subject Classification: Primary: 58F15, 58F17; Secondary: 53C3.
Citation: Jonas C. P. Yu, H. M. Wee, K. J. Wang. Supply chain partnership for Three-Echelon deteriorating inventory model. Journal of Industrial & Management Optimization, 2008, 4 (4) : 827-842. doi: 10.3934/jimo.2008.4.827
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