Modeling and Assumptions

Basic Model Assumptions

  • The demand for each period is known.
  • Shortage of stock is not allowed.
  • Wear and tear are not considered.
  • Manufacturing suppliers are able to coordinate with those in production regarding the modes of ordering and delivery in Scenario 2.
  • The ordering time is a fixed period.
  • The arrival time is a fixed period.
  • The inventory transport mode in situation 1 cannot be used interchangeably but must be utilized for each type of good.
  • The maximum inventory-related parameters are updated every five working days.
  • In Scenario 2, the maximum inventory-related coefficients LT and SSLT are fixed and are not subject to change.
  • In Scenario 2, transportation vehicles going from the logistics distribution center to the distribution location sufficiently accommodate goods provided by the supply manufacturers.
  • An order is placed every five working days.
  • Goods arrive every ten days, a schedule equal to that of two previous orders.