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Mathematical Problems in Engineering
Volume 2015, Article ID 758494, 9 pages
http://dx.doi.org/10.1155/2015/758494
Research Article

Optimal Decision for Fashion Supply Chains with Service Level Constraint and Controllable Lead Time

Guo Li,1,2 Yu-chen Kang,1,2 and Guan Xu3

1School of Management and Economics, Beijing Institute of Technology, Beijing 100081, China
2Center for Energy and Environmental Policy Research, Beijing Institute of Technology, Beijing 100081, China
3Economic and Management School, Wuhan University, Wuhan 410081, China

Received 4 June 2014; Accepted 10 July 2014

Academic Editor: Tsan-Ming Choi

Copyright © 2015 Guo Li et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

We study a two-echelon supply chain inventory model with controllable lead time and service level constraint in fashion supply chains, in which we assume that the unit cost of compressing lead time follows exponential distribution. Under these conditions we investigate the optimal ordering quantity and production quantity in the fashion supply chain by minimizing the joint total cost. Simultaneously, we work out the boundaries of ordering quantity and production quantity, which simplify the computation. Furthermore, numerical examples are presented to test the feasibility of the model. The results show that assuming the unit cost of compressing lead time in accordance with exponential distribution is realistic. It also notices that the optimal order and production decision for fashion supply chains are constrained obviously by the service level and safety factors. What is more, the holding cost rate of both the service level and safety factors has a certain influence on it. And by further analyzing on some references in the last part, we have done some extensions and found some interesting results.