INTEGRATED SUPPLY CHAIN MODEL WITH INFLATION INDUCED DEMAND AND PARTIALLY BACKLOGGED SHORTAGE

Abstract

Generally, inventory control policies for deteriorating items are very sensitive to different marketing policies especially in
chemical, food and pharmaceutical industries. Realizing the importance of such inventory policies in practice, an integrated
production-inventory-marketing model is developed. Inflation induced demand is considered which is accelerated with frequency
of advertisement. The vendor-buyer integrated inventory model is subjected to partial backlogging. Mathematical model is
developed and solved analytically to find the optimal production period, shortage period and average total cost of the integrated
supply chain model. Empirical investigation is carried out and sensitivity analysis is performed to check the stability of the system.
This paper can assist the inventory manager in determining the optimal total cost of the integrated inventory system where inflation
has significant effect on demand and hence total cost.