Stochastic behavior of exchange rate on an international supply chain under random energy price

• Published in: Mathematics and computers in simulation Vol. 205; pp. 232 - 250
• Main Authors: Mittal, Mandeep, Sarkar, Biswajit
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.03.2023
• Subjects: Environmental impact; International supply chain management; Single-setup multiple-delivery (SSMD); Stochastic exchange rate; Trade-credit financing; Stochastic exchange rate; Trade-credit financing; Environmental impact; Single-setup multiple-delivery (SSMD); International supply chain management
• ISSN: 0378-4754; 1872-7166
• DOI: 10.1016/j.matcom.2022.09.007

Monetary policy and logistics management are two important factors for international supply chain management. Selling imported items is a little bit more difficult rather than the domestic supply chain. This paper studies this context by developing a suitable policy for trade-credit financing. The supply chain management uses the just-in-time policy to increase efficiency. An inspection process runs for all inventory to eliminate the risk of random defective rates regarding the quality of items. The vendor uses a multiple shipment policy to deliver inventory to the buyer’s end. The stochastic dollar exchange rate has importance in the international supply chain as supply chain players are situated in different countries. The vendor allows a fixed credit period for paying the wholesale price to the buyer. In the meantime, the buyer increases the sale and boosts the revenue. Environmental effects of carbon emission and randomness of energy prices are discussed within this study. Global optimality of the non-linear objective function is shown both theoretically and numerically by developing an algorithm. Sensitivity analysis has been provided based on the numerical experiment to find the changes in global minimum cost. •An international supply chain management is studied in the stochastic context.•The stochastic behavior of international tax affects the supply chain.•The volatility of energy prices in the international market has been studied.•A monetary policy is discussed for the financial stability of the international supply chain.