A Stackelberg Game Approach in an Integrated Inventory Model with Carbon-Emission and Setup Cost Reduction

Biswajit Sarkar, Sharmila Saren, Mitali Sarkar and Yong Won Seo
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Biswajit Sarkar: Department of Industrial & Management Engineering, Hanyang University, Ansan Gyeonggi-do 15588, Korea
Sharmila Saren: Department of Applied Mathematics with Oceanology and Computer Programming, Vidyasagar University, Midnapore 721 102, India
Mitali Sarkar: Department of Industrial & Management Engineering, Hanyang University, Ansan Gyeonggi-do 15588, Korea
Yong Won Seo: Department of Business Administration, College of Business and Economics, Chung-Ang University, Seoul 06974, Korea

Sustainability, 2016, vol. 8, issue 12, 1-23

Abstract: This paper formulates an integrated inventory model that allows Stackelberg game policy for optimizing joint total cost of a vendor and buyer system. After receiving the lot, the buyer commences an inspection process to determine the defective items. All defective items the buyer sends to vendor during the receiving of the next lot. Due to increasing number of shipments fixed and variable transportation, as well as carbon emissions, are considered, which makes the model sustainable integrated model forever. To reduce the setup cost for the vendor, a discrete setup reduction is considered for maximization more profit. The players of the integrated model are with unequal power (as leader and follower) and the Stackelberg game strategy is utilized to solve this model for obtaining global optimum solution over the finite planning horizon. An illustrative numerical example is given to understand this model clearly.

Keywords: integrated-inventory model; stackelberg approach; setup cost reduction; transportation cost; carbon emission reduction (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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