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Inter-dependent lead-time and ordering cost reduction strategy: a supply chain model with quality control, lead-time dependent backorder and price-sensitive stochastic demand

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Abstract

This research work addresses an inter-dependent reduction strategy of lead time and ordering cost in a two-stage single vendor and single buyer supply chain model with price-sensitive stochastic demand. Buyer’s backorder rate is a variable, as it depends on the variable lead time. Quality improvement is another aspect of this study. The objective of this study is three folds. Firstly, reducing the lead time and ordering cost simultaneously. Secondly, improving the quality of products and third, optimizing order lot size, lead time, process quality parameter, safety factor, ordering cost, lead time crashing cost, backorder rate, and the number of deliveries so that the joint expected total profit becomes maximum. Stackelberg game and Joint decision, both approaches are discussed. Numerical result shows that the Joint decision approach gives better result than the Stackelberg game approach. Sensitivity analysis for Case-III with respect to some key parameters has been carried out.

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Abbreviations

EOQ:

Economic order quantity

EDI:

Electronic data interchange

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Authors and Affiliations

  1. Department of Mathematics, Haldia Government College, Vidyasagar University, Purba Medinipur, West Bengal, 721657, India

    Monami Das Roy

  2. Department of Mathematics, Kishore Bharati Bhagini Nivedita College, Ramkrishna Sarani, Behala, Kolkata, 700060, India

    Shib Sankar Sana

Authors
  1. Monami Das Roy
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  2. Shib Sankar Sana
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Contributions

M. Das Roy: Literature review, Model formulation, Mathematical analysis and numerical solution. S. S. Sana: Overall supervision, Model formulation.

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Correspondence to Monami Das Roy.

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The authors do hereby declare that there is no conflict of interests of other works regarding the publication of this paper. This article does not contain any studies with human participants or animals performed by any of the authors.

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Das Roy, M., Sana, S.S. Inter-dependent lead-time and ordering cost reduction strategy: a supply chain model with quality control, lead-time dependent backorder and price-sensitive stochastic demand. OPSEARCH 58, 690–710 (2021). https://doi.org/10.1007/s12597-020-00499-w

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