Evaluation of supply chain structures using a delayed product differentiation process

In this paper, we consider a two-level supply chain consisting of a retailer and n "non-identical" customers. The retailer orders different perishable products in response to the demands of the customers. The unsatisfied demand at a retailer is partially backlogged with a time-proportional backlogging rate. We formulate models for a postponement system and an independent system to minimize the total average cost function per unit time for ordering and keeping n "non-instantaneous deteriorating items." An algorithm is given to derive the optimal solutions of the proposed models. The impact of the deterioration rate on the inventory replenishment policies is studied with the help of both theoretical and numerical results.