An optimal policy for three-tier supply chain for processing an agricultural product with a stochastic demand

S.M. Shahidul Islam and Mohammad Abdul Hoque

International Journal of Services and Operations Management, 2019, vol. 33, issue 3, 287-310

Abstract: Agricultural products are very common in our daily life. A few works limited to a two-tier supply chain (SC) of these products, have been carried out by controlling their management cost. This study develops a threetier SC model of processing an agricultural product with a stochastic demand, consisting of a single seasonal supplier, a single manufacturer and multiple retailers. A safety stock is maintained to meet extra demand. The objective is to identify the number of shipments and the shipment sizes in a cycle to be delivered to the manufacturer and the retailers in order to minimise the chain-wide cost. We develop two optimal solution methods to the model. These methods and the parallel multiple jumps technique used to find integer solutions are summarised in an algorithm to obtain global optimal solutions to the concerned problems. Managerial insight of this model is highlighted with a numerical illustration.

Keywords: agricultural product; inventory; lot size; stochastic demand; supply chain; integer solution; optimal policy; safety stock; three-tier. (search for similar items in EconPapers)
Date: 2019
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