Centralized replenishment policy for deteriorating items in a three echelon supply chain under stochastic lead time

One of the significant problems faced in inventory management is how to control and maintain the inventories of deteriorating items. Most of studies developed in this field, assumed supply lead time is fixed while that is hard to be exactly determined in the majority procurement systems. Also, most of integration inventory models for supply chains with a deterioration item have been developed for two-echelon supply chains. In this paper, in order to fill these gaps, we focus on optimally determining replenishment policy for deteriorating items among all the partners in a three echelon supply chain with stochastic supply lead time for the buyer. For modeling the deterioration process, a nonlinear holding cost function is considered. Then numerical examples are solved and sensitivity analysis is done to distinguish the situations which are more cost-effective for centralized decision making and demonstrate the applicability of the proposed model.