# American Institute of Mathematical Sciences

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October  2008, 4(4): 827-842. doi: 10.3934/jimo.2008.4.827

## Supply chain partnership for Three-Echelon deteriorating inventory model

 1 Logistics Management Department, Takming University of Science and Technology, Taipei 114, Taiwan, ROC, China 2 Department of Industrial & Systems Engineering Chung Yuan Christian University, Chungli, 32023, Taiwan, ROC, Graduate School of Business, Curtin University of Technology, Perth WA 6845, Australia 3 Department of Industrial Management, National Taiwan University of Science and Technology, Taipei 106, Taiwan, ROC, Taiwan

Received  January 2007 Revised  August 2008 Published  November 2008

The different facilities in a supply chain usually develop their partnership through information sharing and strategic alliances to achieve the overall benefit of the system. In this study, we propose a supply chain network system with two producers, a single distributor and two retailers. Each retailer has a deterministic demand rate. A mathematical model of deteriorating item is developed to consider a vertical integration of the producer, the distributor and the retailer and a horizontal integration of the producers. We show how the integrated approach to decision making can achieve global optimum. Numerical examples and a sensitivity analysis are given to validate the proposed system.
Citation: Jonas C. P. Yu, H. M. Wee, K. J. Wang. Supply chain partnership for Three-Echelon deteriorating inventory model. Journal of Industrial & Management Optimization, 2008, 4 (4) : 827-842. doi: 10.3934/jimo.2008.4.827

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