Three-stage supply chain coordination under fuzzy random demand and production rate with imperfect production process (original) (raw)
2013, International Journal of Operational Research
Today globalization and international competition presents organizations with unprecedented challenges and new business opportunities. Due to this, supply chain modelling is becoming a burning topic in front of academicians and industrialists. Huang (2002) developed an integrated vendor-buyer model to optimize the joint annual cost with the assumption that manufactured items were not of good quality. Lee and Wu (2006) developed two echelon supply chain system, with one supplier and one retailer who can choose different replenishment policy: one the traditional method and other statistical process control, based on replenishment method. They found that latter outperforms the traditional method in the categories of inventory variation. Kamath and Bhattacharya (2006) developed a two echelon supply chain that handles multiple products under stochastic demand. Singh et al. (2007) discussed optimal policy for decaying items with stock-dependent demand under inflation in a supply chain. Rau and Ouyang (2008) presented an integrated productioninventory policy for a linear trend in demand. They considered that no defective items were produced during the whole planning horizon. Shah and Gor (2009) presented an integrated model for vendor and buyer when the input was random with constant demand for both parties and observed that the cooperative approach was beneficial to reduce the cost when compared with an independent decision by both parties. Wang et al. (2010) developed a coordination issue in a single manufacture single buyer supply chain where demand of product from buyer's end was random. They adopted two different production patterns and obtained the optimal solution in centralized form and decentralized form. They provided a coordination scheme in supply chain which was much better than the traditional approach. Demand is the most volatile of all the market forces, as it is the least controlled by decision maker. Even a slight change in the demand for any particular item causes a lot of havoc with the producing unit concerned. Every change in demand is directly correlated to the production rate of that particular commodity. Whenever the production rate of any inventory is changed, it unswervingly affects the storage of those items in stock. Overall, it means that every time the demand for any commodity goes a noticeable change, the inventory manager has to reformulate the complete logistic of management for that item. Here, one thing becomes very apparent, even if the firm is able to take the jolt of changed customer's
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