Coordination policy for a three echelon supply chain considering imperfect quality items (original) (raw)
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Three-layer supply chain – A production-inventory model for reworkable items
Applied Mathematics and Computation, 2012
This article develops an integrated production-inventory model considering perfect and imperfect quality items, product reliability and reworking of defective items in the environment of supply chain management. Manufacturer, supplier and retailer are the members of the supply chain where supplier delivers raw materials to the manufacturer and sends back the defective raw materials after completion of inspection at a single lot with less market price. In this system, production starts to produce good items at the beginning of the production. The production system may undergo an ''out-of-control'' state from an ''in-control'' state, after a certain time that follows a probability density function. The density function varies with reliability of the machinery system that may be controlled by new technologies, investing more capital. The defective items produced in ''out-of-control'' state are reworked at a cost just after the regular production time. This model considers the impact of business strategies such as optimal order size of raw materials, production rate and unit production cost, and idle times in different sectors in a collaborating marketing system. An analytical method is employed to optimize the production rate and raw material order size for maximum expected average profit. A numerical example along with four graphical illustrations is considered and its sensitivity analysis is provided to test feasibility of the model.
Scientia Iranica, 2020
This paper develops a three-layer supply chain for defective and non-defective types of produced items by supplier and manufacturer. The condition of the chain for the supplier and manufacturer that, after complition of screening defective items are sold to the supplier to produce other items using these defective items. In the subsequent stage, the retailer accepts the non-defective items produced and screening by the manufacturer. Hence the retailer receives the perfect quality items for selling to the customers, but the retailer considers the effect of the deterioration of items. This model also considers the impact of several business strategies such as; optimal order size of raw materials, production rate, unit production cost, idle time costs of the supplier, and manufacturer in a collaborative marketing system, etc. to determine the optimum average profit of the integrated model. This study discusses the selling price of the retailer, demand rate of the customer, purchase cost of supplier and holding cost, which can be a significant breakthrough in expanding the profit of the business in real terms. Numerical example and sensitivity analysis are presented to illustrate the phenomenon of theoretical study and demonstrate the managerial implication of the model.
S:-Based on revenue sharing contract, this paper discusses the supply chain coordination problem of assembly system.It constructs an assembly system model consisting of an assembler and n suppliers.Due to reasons such as technology or artificial parts supplier delivered to the assembly of parts will have different degree of damage.Therefore, it is more realistic to assume that there are defective parts for n parts.The supply chain cannot be coordinated without the benefit sharing.Then, the "income sharing + subscription subsidy" contract was proposed.The study found that the contract enables the supply chain to be coordinated.This paper studies the optimal delivery quantity of component suppliers in risk aversion.Because the mean value conditional risk value model (M-CVaR) is a discussion of the benefit maximization decision of the risk situation.But it is not objective to take the profit and loss as risk factors.Because there is no risk in the part where the benefits are greater than zero.So you can only think about that part of the risk of loss.Based on this, the P-CVaR model is proposed in this paper.The model is only considers that supplier revenue does not meet the expected revenue loss.The study found that the optimal supply quantity of the supplier based on P-CVaR model was not related to the decision of the assembler, but only to the degree of risk aversion.Finally, the correctness of the model is verified by an example.
RAIRO - Operations Research
Collaboration has evolved as a key component of many modern supply chains, supporting the competitive advantages of companies in a range of operations from manufacturing to sales. With this viewpoint, the present paper develops an integrated inventory model in which manufacturing is carried out at the vendor’s end so as to fulfill demand at the buyer’s doorway. As the production process is presumed to be imperfect it shifts from an “in-control” state to “out-of-control” state at any random time and yields non-conforming items. The vendor uses regular preventive maintenance actions for the efficient operation of the production system and offers free minimal repair warranty on the products sold to the buyer. Along with preventive maintenance actions the vendor also uses the rework process and restoration process as effective steps towards minimizing the imperfections of the production system. The proposed model solves the non-linear cost minimization problem through a generalized redu...
IFAC-PapersOnLine
The production system is unreliable, therefore, prone to random failures directly affecting the products quality. The machine status is affected by the production variation and its use over time. In this work a new maintenance strategy with corrective, imperfect and perfect maintenance is employed when the process is respectively in control, surveillance, and critical stages. We increase the reliability of the process and subsequent reduction in the production of the non-conformal items. Several retail houses are to satisfy random customer demands during the finite production horizon with service, quality and production bounds constraints. The work established a collaborative production planning with inventory management considering the production, holding, delivery, delay, and quality costs. Conclusively, the total maintenance costs (corrective, imperfect, and perfect) are minimized, according to the optimal production plans and control chart parameters as decision variables.
Scientia Iranica, 2021
The classical manufacturing systems assume that all of produced items are of perfect quality. They also do not consider the rework process in manufacturing operations. Moreover, most of the previous literature consider single stage production-inventory systems and do not consider multi stage options. However, in real world production-inventory systems, production of defective items is inevitable, and a fraction of the produced items may be 2 defective. In addition, to avoid extra costs and consider environmental issues, organizations tend to reworking activities. We propose single and multi-stage production-inventory systems in manufacturing operations where the process is defective, rework is possible and a percent of items are scrapped. A main assumption, in the current paper, is that the defective rate is assumed to be uncertain parameter. The grey systems theory, as a mathematical tool to address the uncertain information in real-world situations, is utilized to model the random defective rate via a grey nonlinear programming problem. The proposed issues are investigated via numerical examples to assess the impact of grey parameters on optimal solutions.
Optimal inventory model for items with imperfect quality and shortage backordering
Omega, 2007
This paper develops a model to determine the optimal reliability and production rate that achieves the biggest total integrated profit for an imperfect production process under allowable shortage. In this system, production facility may shift 'in-control' state to an 'out-control state' at any random time. The basic assumption of the classical EPL model is that 100% of product is of perfect quality. Here we consider two type of production process in a cycle time. One is 'in-control' state at the starting of the production which provides conforming quality items and second one is 'out-control' state after certain time due to higher production rate and production run time. The proposed model is formulated assuming that a certain percent of total product which described by a function is defective. The imperfect quality items are reworked at a cost to restore its quality to the original one. The total cost function is illustrated by numerical examples and also its sensitivity analysis is carried out.
International Journal of Industrial Engineering Computations, 2017
Quality decisions are one of the major decisions in inventory management. It affects customer's demand, loyalty and customer satisfaction and also inventory costs. Every manufacturing process is inherent to have some chance causes of variation which may lead to some defectives in the lot. So, in order to cater the customers with faultless products, an inspection process is inevitable, which may also be prone to errors. Thus for an operations manager, maintaining the quality of the lot and the screening process becomes a challenging task, when his objective is to determine the optimal order quantity for the inventory system. Besides these operational tasks, the goal is also to increase the customer base which eventually leads to higher profits. So, as a promotional tool, trade credit is being offered by both the retailer and supplier to their respective customers to encourage more frequent and higher volume purchases. Thus taking into account of these facts, a strategic production model is formulated here to study the combined effects of imperfect quality items, faulty inspection process, rework process, sales return under two level trade credit. The present study is a general framework for many articles and classical EPQ model. An analytical method is employed which jointly optimizes the retailer's credit period and order quantity, so as to maximize the expected total profit per unit time. To study the behavior and application of the model, a numerical example has been cited and a comprehensive sensitivity analysis has been performed. The model can be widely applicable in manufacturing industries like textile, footwear, plastics, electronics, furniture etc.
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.
Coordination mechanism for a deteriorating item in a two-level supply chain system
Applied Mathematical Modelling, 2014
The subject of the coordination between the suppliers and the buyers in multi-echelon inventory-distribution systems has been studied by many researchers. This paper considers a supply chain including a manufacturer and several buyers and assumes that the inventory items deteriorate over time and its inventory level decreases. In order to determine the order policies, coordination over the supply chain is achieved by scheduling the buyers' delivery days and their coordination with the manufacturer's production cycle. A mathematical model is developed and analyzed. To test the efficiency of the proposed model, two other models with the supposition of lot-sizing policies with common order cycle and independent deciding are also developed. In comparison to the other two models, the numerical results show that the synchronizing model of production and delivery cycles works better and has less total cost. In addition, in order to encourage the buyers in cooperation, a model on profit sharing is proposed that equitably shares the total savings with all the parties.