A solution to the transportation hazard problem in a supply chain with an unreliable manufacturer

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Abstract

The current study focuses on a two-echelon supply chain for a reliable retailer, an unreliable manufacturer, and selling price-dependent demand. Due to an unreliable manufacturer and transportation hazards, shortages arise, which negatively impact the reputation of the retailer. Moreover, customers are more conscious of the environment, as a result, most of the industry focuses on the production of green products. To reduce the holding cost of the retailer, a fuel consumption-based single-setup-multi-unequal-increasing-delivery policy was utilized in this current study. With this transportation policy, the number of shipments increases, which directly increases carbon emissions and transportation hazards. To protect the environment, the green level of the product is enhanced through some investments. The demand varies with the price of the product as well as with the level of the greenness of the product. Due to uncertain demand, the rate of the production is treated as controllable. A classical optimization technique and distribution-free approach have been utilized to obtain the optimum solution and the optimized system profit. To prove the applicability, the study is illustrated numerically and graphically via a well-explained analysis of sensitivity. The study proves that single-setup-multi-unequal-increasing delivery policy is 0.62% beneficial compared to single-setup-single-delivery policy and 0.35% better than the single-setup-multi-delivery policy.

Keywords

supply chain management / unreliability / transportation / single-setup-multiple-unequal-delivery-policy / green quality

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