Stochastic behavior of exchange rate on an international supply chain under random energy price

Mandeep Mittal and Biswajit Sarkar

Mathematics and Computers in Simulation (MATCOM), 2023, vol. 205, issue C, 232-250

Abstract: Monetary policy and logistics management are two important factors for international supply chain management. Selling imported items is a little bit more difficult rather than the domestic supply chain. This paper studies this context by developing a suitable policy for trade-credit financing. The supply chain management uses the just-in-time policy to increase efficiency. An inspection process runs for all inventory to eliminate the risk of random defective rates regarding the quality of items. The vendor uses a multiple shipment policy to deliver inventory to the buyer’s end. The stochastic dollar exchange rate has importance in the international supply chain as supply chain players are situated in different countries. The vendor allows a fixed credit period for paying the wholesale price to the buyer. In the meantime, the buyer increases the sale and boosts the revenue. Environmental effects of carbon emission and randomness of energy prices are discussed within this study. Global optimality of the non-linear objective function is shown both theoretically and numerically by developing an algorithm. Sensitivity analysis has been provided based on the numerical experiment to find the changes in global minimum cost.

Keywords: International supply chain management; Stochastic exchange rate; Single-setup multiple-delivery (SSMD); Trade-credit financing; Environmental impact (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:matcom:v:205:y:2023:i:c:p:232-250

DOI: 10.1016/j.matcom.2022.09.007

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