TWO-ECHELON SUPPLY CHAIN MODEL WITH MANUFACTURING QUALITY IMPROVEMENT AND SETUP COST REDUCTION (original) (raw)
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Mathematics
This model investigates the variable production cost for a production house; under a two-echelon supply chain management where a single vendor and multi-retailers are involved. This production system goes through a long run system and generates an out-of-control state due to different issues and produces defective items. This model considers the reduction of the defective rate and setup cost through investment. A discrete investment for setup cost reduction and a continuous investment is considered to reduce the defective rate and to increase the quality of products. Setup and processing time are dependent on lead time in this model. The model is solved analytically to find the optimal values of the production rate, safety factors, optimum quantity, lead time length, investment for setup cost reduction, and the probability of the production process going out-of-control. An efficient algorithm is constructed to find the optimal solution numerically and sensitivity analysis is given t...
Manufacturing quality improvement and setup cost reduction in a vendor-buyer supply chain model
European J. of Industrial Engineering, 2017
Quality improvement and setup cost reduction of any production system are endless procedure. Customer's demand is always intended to have the best quality product and the industries always try to improve the quality of products. This paper develops a two-echelon supply chain model with quality improvement of products and setup cost reduction under controllable lead time. The lead time demand follows a normal distribution and in the second case, it does not consider any specific distribution except a mean and standard deviation. Both models are solved analytically to obtain global solution. Two improved iterative algorithms are developed in order to obtain the optimal results of decision variables numerically to minimise the total system cost. The expected value of additional information is calculated to show the financial effect for collecting the information about lead time demand distribution. Some numerical examples and sensitivity analysis are given to illustrate the model. [
Flexible Setup Cost and Deterioration of Products in a Supply Chain Model
International Journal of Applied and Computational Mathematics, 2015
Product reliability is of significant importance in today's technological world. People rely more and more upon the sustained functioning of machinery and complex equipments for purposes such as health, economic welfare, safety, to name just a few. Thus, in a business arena, it is critical to assess the reliability of new products. In this model, a two echelon supply chain model with variable setup cost and deterioration cost are analyzed. The setup cost is directly proportional and the deterioration rate is inversely proportional to reliability. Algebraical procedure has been employed to obtain the optimal solution of this model. The objective is to minimize the total cost of the entire system by considering reliability as a decision variable. Some numerical examples, sensitivity analysis, and graphical representations are considered to illustrate the model.
An Integrated Vendor and Buyer Inventory Model with Quality Improvement and Setup Cost Reduction
Operations Research and Applications: An International Journal (ORAJ), 2016
This paper attempts to determine optimal production run time and joint capital investment in setup cost reduction and process quality for production system such that the total cost is minimized. We assumed that the setup cost and process quality are logarithmic function. Main focus for this paper is the setup cost reduction. The proposed model is based on the total cost for the single vendor and single buyer. Then, an algorithm procedure is developed in order to find the optimal solution and numerical example is used to demonstrate the benefits of the model. By logarithmic investment function, the optimal investment for process quality and setup cost reduction investment also are obtained. Our objective is to develop an algorithm to determine the order quantity, setup cost, process quality and number of deliveries simultaneously, so that the total cost incurred is minimum.
A production-inventory model with probabilistic deterioration in two-echelon supply chain management
In this study, a production-inventory model is developed for a deteriorating item in a twoechelon supply chain management (SCM). An algebraical approach is applied to find the minimum cost related to this entire SCM. We consider three types of continuous probabilistic deterioration function to find the associated cost. The purpose of this study is to obtain the minimum cost with integer number of deliveries and optimum lotsize for the three different models. Some numerical examples, sensitivity analysis and graphical representation are given to illustrate the model. A numerical comparison between the three models is also given.
Coordination policy for a three echelon supply chain considering imperfect quality items
International Journal of Industrial Engineering Computations, 2014
In this study, we develop a three echelon supply chain model for items to determine the optimal reliability and production rate, which achieves the biggest total integrated profit for an imperfect manufacturing process. Here, we have taken a supplier, a manufacturer and a retailer in which supplier supplies raw materials to manufacturer, manufacturer produces perfect and imperfect quality items because practically it happens and manufacturer supplies perfect quality items to the retailers. In production system, production facility may shift from an in-control state to an out-ofcontrol state at any random time. The basic assumption of classical economic manufacturing quantity model is that all manufacturing items are of perfect quality but the assumption is not true in practice. The proposed study is formulated assuming that a certain percent of total product is defective. This percentage also varies with production rate and production run time. The defective items are restored in original quality by reworked at some costs to maintain the quality of products in a competitive market. Finally, numerical example and its graphical representation are given to illustrate the proposed model. Sensitivity analysis is also provided to test feasibility of the model.
International Journal of Industrial and Systems Engineering, 2011
Most of the existing research has focused on a two stage single-vendor single-buyer supply chain. However, in reality, supply chain networks are more complex and involve more than just a vendor and a buyer. This paper deals with the joint economic lot sizing problem (JELP) in the context of a three stage supply chain consisting of a single supplier, single manufacturer and multi retailers. The objective is to specify the timings and quantities of inbound and outbound logistics for all parties involved such that the chain-wide total ordering, setup, raw material and finished product inventory holding costs are minimized. In developing the model, the cycle time at each stage is set to be an integer multiple of that for the adjacent downstream stage. To bear a better resemblance to practice, shipments from a particular lot are allowed to take place during production and not after producing the whole lot. We employ derivative-free methods to derive a near closed form solution for the developed model. A numerical example is presented for illustrative purposes and a comparison to models established in the literature is also provided.
Optimization of Supply Chain Planning with Considering Defective Rates of Products in Each Echelon
Technology and …, 2011
Supply Chain Planning has recently received considerable attention in both academia and industry. The major targets of supply chain planning are to reduce production costs, risks, delays and maximize or improve profit, quality of product, customer service which result in increased competitiveness, more customer satisfaction and portability. In this study, a new bi-objective mathematical modeling for a four-echelon supply chain, consisting multi-supplier, assembler, distribution center and retailer, with considering the defective rates of products is proposed. Then, fuzzy compromise programming method is applied to solve the non-linear mixed-integer bi-objective model. Finally, a numerical example is given to illustrate application of the proposed algorithm and the efficacy and efficiency of that are verified through this section. It has been shown that such an approach can significantly help the managers to decide properly toward economic supply chain planning.
A MULTI-ECHELON SUPPLY CHAIN INVENTORY MODEL WITH QUADRATIC DEMAND RATE AND VARIABLE DETERIORATION
In this paper, an integrated supply chain model has been developed under the assumption of demand rate is quadratic form which starts from zero in the beginning and ends to zero at the completion of the cycle. The variable rate of deterioration has been taken. In this model, three suppliers, one distributor and three retailers are considered. The replenishment of items at the distributor and retailers is considered as instantaneous. Shortage of items is not allowed. Cost minimization technique has been used to obtain the optimal values of the parameter. In recent year the interest of researchers has been increased in a study of supply chain management. A supply chain is a network of suppliers, manufacturers, distributors and retailers that perform the function of procurement of material, transformation of these materials into intermediate and finished product and distribution of this product to customers. This chain is traditionally characterized by forward flow of materials and backward flow of information. The three key members of the supply chain (supplier, distributor and the retailer) managed independently their inventories. Increasing competitive pressure and due to decrease in margin of profit the company force to develop supply chain which provide quick response to customers' needs and reducing the cost of carrying material. The number of deliveries is derived in cooperation with each other to achieve a minimum total integrated cost. Clark A. J.Scarf Herbert [2] in year 1960 was the first to consider the echelon stock in the inventory system. Besseler S. A. and Veinott A.F. [1] in year 1966 discussed the optimal policy for a dynamic multi-echelon inventory model. Wee H. M [19] developed a model with an exponential decaying inventory to determine optimal joint total relevant annual cost of the buyer and seller. He extended the research to an all-unit quantity discount inventory policy for deteriorating items with various deteriorating rates and negotiation factors and determined the optimal replenishment interval and discount price so that the joint total annual cost is minimized. Risk reduction of items shortage is also an important factor in supply management. The shortage of items may be avoided through suppliers in a supply chain. In earlier literature, it is assumed that inventory is replenished by a single supplier. But in reality there are situations when more than one supplier is required to satisfy a desirable goal. Sedarage Dayani, Fujiwala O. and Luong, Huynh Trang [17] presented mathematical model of N-supplier inventory systems and derived optimal inventory policy. Ranga V. Ramasesh, J. Keith Ord and Jack C. Hayya [15] showed that dual sourcing is required when requirement is large or lead time is uncertain. Hon Shiang Lau and Long Geng Zha [11] presented optimal ordering policies with two suppliers when lead times and demand are all stochastic. Yu [21] develops a two-supplier three-echelon inventory model that integrates the upper, middle and lower levels in supply chain. He describes how to integrated approach to decision making can achieve global optimum as compared to independent decision by the supplier, the distributor and the retailer. Mishra P.N