This paper presents a novel approach to safety stock management and investigates the impact of lead time reduction within an integrated vendor–buyer supply chain framework using present value where lead time and ordering cost reductions act dependently. In particular, the cost of the safety stock is determined by adopting a logistic approximation to the standard normal cumulative distribution. The service level is formulated in relation to the dimension of the single shipment, to the average demand of the buyer and to the number of admissible stockouts. We first discuss the case where the lead time and ordering cost reductions with linear function, and then consider the logarithmic functional relationship. Numerical examples including the sensitivity analysis with some managerial insights of system parameters is provided to validate the results of the supply chain models. The main contribution of this paper is introducing various types of ordering cost reduction in Braglia et al. (Appl. Stoc. Mod. Bus. Ind. 32 (2016) 99–112) by handling a new approach.
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DOI : 10.1051/ro/2019051
Mots-clés : Safety stock management, integrated vendor–buyer supply chain, logistic approximation, ordering cost reductions, present value
@article{RO_2020__54_5_1327_0,
author = {Tharani, S. and Uthayakumar, R.},
title = {A novel approach to safety stock management in an integrated supply chain with controllable lead time and ordering cost reduction using present value},
journal = {RAIRO - Operations Research - Recherche Op\'erationnelle},
pages = {1327--1346},
publisher = {EDP-Sciences},
volume = {54},
number = {5},
year = {2020},
doi = {10.1051/ro/2019051},
mrnumber = {4116686},
language = {en},
url = {http://www.numdam.org/articles/10.1051/ro/2019051/}
}
TY - JOUR AU - Tharani, S. AU - Uthayakumar, R. TI - A novel approach to safety stock management in an integrated supply chain with controllable lead time and ordering cost reduction using present value JO - RAIRO - Operations Research - Recherche Opérationnelle PY - 2020 SP - 1327 EP - 1346 VL - 54 IS - 5 PB - EDP-Sciences UR - http://www.numdam.org/articles/10.1051/ro/2019051/ DO - 10.1051/ro/2019051 LA - en ID - RO_2020__54_5_1327_0 ER -
%0 Journal Article %A Tharani, S. %A Uthayakumar, R. %T A novel approach to safety stock management in an integrated supply chain with controllable lead time and ordering cost reduction using present value %J RAIRO - Operations Research - Recherche Opérationnelle %D 2020 %P 1327-1346 %V 54 %N 5 %I EDP-Sciences %U http://www.numdam.org/articles/10.1051/ro/2019051/ %R 10.1051/ro/2019051 %G en %F RO_2020__54_5_1327_0
Tharani, S.; Uthayakumar, R. A novel approach to safety stock management in an integrated supply chain with controllable lead time and ordering cost reduction using present value. RAIRO - Operations Research - Recherche Opérationnelle, Tome 54 (2020) no. 5, pp. 1327-1346. doi : 10.1051/ro/2019051. http://www.numdam.org/articles/10.1051/ro/2019051/
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