An optimal inventory model with interaction of lot size, production rate and lead-time in a fuzzy back-order system

2019 ◽  
Vol 53 (2) ◽  
pp. 517-538
Author(s):  
S. Priyan ◽  
P. Mala ◽  
S. Tiwari
Keyword(s):  
Decision Making ◽  
Production Rate ◽  
Lead Time ◽  
Trade Credit ◽  
Strategic Decision ◽  
Sensitivity Analyses ◽  
Order System ◽  
Lot Size ◽  
Order Rate ◽  
Back Order

This paper examines the decision-making about the interaction of lot size, production rate and lead time between a vendor and a buyer with the consideration of trade credit and fuzzy back-order rate. We assume that the lead time demand is distribution free and the back-order rate is triangular fuzzy number. An economic model is design to determine the optimal lot-size, production rate and lead time while minimizing system total cost. A minimax approach is applied to tackle the model and designed an iterative algorithm to obtain the optimal strategy. Numerical example and sensitivity analyses are given to demonstrate the performance of the proposed methodology and to highlight the differences between crisp and the fuzzy cases. This paper provides optimal decision support tools for managers in the form of mathematical model that improve operational, tactical, and strategic decision making in the fuzzy system. This paper aims to raise the awareness of managers with regard to realistic inventory problems.

scholarly journals Production rate and lot size-dependent lead time reduction strategies in a supply chain model with stochastic demand, controllable setup cost and trade-credit financing

2020 ◽  
Author(s):  
Monami Das Roy ◽  
Shib Sankar Sana
Keyword(s):  
Production Rate ◽  
Lead Time ◽  
Trade Credit ◽  
Chain Model ◽  
Lot Size ◽  
Setup Cost ◽  
Lead Time Reduction ◽  
Supply Chain Model ◽  
Reduction Strategies ◽  
Credit Financing

This study explores simultaneous reduction strategies of lead time and setup cost in a two-stage supply chain model under trade-credit financing. Lead time depends on avariable production rate and lot size. It consists of setup, production, and transportation time which are shortened to reduce lead time. Although double safety factors are considered to avoid stock-out; but still backorders take place as the demand during the lead time is stochastic.Setup cost is reduced by including an extra investment cost. In addition, the vendor offers a fixed credit period to the buyer to settle the account. The objective is to minimize the integrated expected total cost and optimize the order quantity, number of deliveries, setup and transportation time, setup cost, safety factor for the first batch, and the production rate. A multi-variable optimization technique is used for these purposes. Furthermore, a numerical example together with managerial insights is provided for the establishment and applicability of the proposed model.The numerical results show that the introduction of setup cost reduction and trade-credit financing along with lead time reduction is more beneficial by means of integrated expected total cost reduction.

scholarly journals Lead-time Dependent Ordering Cost Reduction and Trade-credit: A Supply Chain Model with Stochastic Demand and Rework

2020 ◽  
Vol 8 (5) ◽  
pp. 5113-5117
Keyword(s):  
Supply Chain ◽  
Cost Reduction ◽  
Lead Time ◽  
Trade Credit ◽  
Chain Model ◽  
Lot Size ◽  
Expected Cost ◽  
Production Run ◽  
Supply Chain Model ◽  
Ordering Cost Reduction

This study focuses on an integrated vendor-buyer supply chain model where the lead-time and ordering cost reduction act dependently. The lead time demand of a product follows a normal distribution. The manufacturing process is imperfect. During production run time, a certain percentage of defective products are produced, which are immediately reworked. Trade-credit financing has been taken into consideration. The goal of this study is to minimize the joint total expected cost by providing an inter-dependent reduction strategy of lead-time and ordering cost along with the determination of the optimal values of lead-time, number of deliveries, order lot size, ordering cost, lead-time crashing cost, and the joint total expected cost. A solution algorithm and a numerical example are presented to illustrate and establish the integrated model. This model can be used in textiles, automobiles and computers industries.

scholarly journals Model Persediaan Pemasok-Pembeli Dengan Produk Cacat Dan Kecepatan Produksi Terkontrol.

2016 ◽  
Vol 15 (2) ◽  
pp. 103
Author(s):  
NELITA PUTRI SEJATI ◽  
WAKHID AHMAD JAUHARI ◽  
CUCUK NUR ROSYIDI
Keyword(s):  
Sensitivity Analysis ◽  
Production Rate ◽  
Lead Time ◽  
Demand Uncertainty ◽  
Lot Size ◽  
Defective Items ◽  
Total Cost ◽  
Joint Economic Lot Size ◽  
Demand Rate ◽  
The Impact

Penelitian ini mengembangkan model persediaan Joint Economic Lot Size (JELS) pada pemasok tunggal pembeli tunggal untuk jenis produk tunggal dengan mempertimbangkan produk cacat dan tingkat produksi terkontrol. Tingkat permintaan pada pembeli bersifat stokastik. Pengiriman dilakukan dari pemasok ke pembeli dalam ukuran lot pengiriman yang sama dan lead time pengiriman bersifat tetap. Produk cacat yang ditemukan oleh pembeli pada saat inspeksi disimpan secara sementara di gudang pembeli hingga pengiriman berikutnya tiba untuk selanjutnya produk cacat dikembalikan kepada pemasok. Fungsi tujuan dari model ini adalah meminimasi total biaya persediaan gabungan pemasok pembeli dengan variabel keputusan, yaitu frekuensi pengiriman, periode review, dan tingkat produksi. Analisis sensitivitas dilakukan untuk melihat pengaruh perubahan parameter-parameter tertentu terhadap model. Hasil yang didapatkan dari analisis sensitivitas menunjukkan bahwa total biaya persediaan gabungan sensitif terhadap perubahan nilai parameter persentase produk cacat, ketidakpastian permintaan, dan permintaan. In this paper, we consider a joint economic lot size (JELS) model consisting of single vendor single buyerwith single product. We intend to study the impact of defective items and controllable production rate onthe model. The demand in buyer side is assumed to be stochastic. The delivery of lot from vendor to buyer is conducted under equal size shipment and the lead time is assumed to be constant. The defective items founded by the inspector in buyer side are carried in buyer’s storage until the next shipment and will be returned to the vendor. The goal of the proposed model is to determine optimal delivery frequency, review period and production rate by minimizing the joint total cost. A sensitivity analysis is performed to show the impact of the changes of the decision variables on model’s behavior. The result from the sensitivity analysis shows that the joint total cost is sensitive to the changes of defect rate, demand uncertainty and demand rate. 

A Design of Launching Pattern for Final Inspection of Assembled Cars in Mixed Model Assembly Line

2014 ◽  
Vol 627 ◽  
pp. 332-336
Author(s):  
P. Vinitsorn ◽  
S. Prombanpong
Keyword(s):  
Production Rate ◽  
Lead Time ◽  
Mixed Model ◽  
Fixed Rate ◽  
Short Lead Time ◽  
Final Inspection ◽  
Back Order ◽  
Mixed Model Assembly Line ◽  
Mixed Model Assembly ◽  
Working Hour

The objective of this paper is aimed at determining the sequential pattern of a newly mixed-models assembled cars entering into the final inspection lines so that the required production rate of each model can be obtained as specified. The inspection lines are consisted of three parallel conveyor lines and each line is designed to be able to inspect any car models. One can imagine that each model with different inspection details will definitely consume different lead time to complete the job. As a result, the model with short lead time can be finished faster than one with longer lead time. Thus, by the end of each inspection hour, it is difficult to maintain the exact production rate of each product. The unfinished model will become a back order and will be completed in the next hour and therefore the rest of the schedule will be affected. Without knowing of the fixed rate launching algorithm, the exact production rate of each model for each working hour can not be met.

A vendor–buyer inventory model with lot-size and production rate dependent lead time under time value of money

2020 ◽  
Vol 54 (4) ◽  
pp. 961-979 ◽  
Author(s):  
Sumon Sarkar ◽  
Bibhas Chandra Giri ◽  
Ashis Kumar Sarkar
Keyword(s):  
Production Rate ◽  
Lead Time ◽  
Demand Uncertainty ◽  
Net Present Value ◽  
Numerical Study ◽  
Optimal Solution ◽  
Integrated System ◽  
Market Demand ◽  
Lot Size ◽  
Regular Production

The paper studies an integrated vendor–buyer model with shortages under stochastic lead time which is assumed to be variable but depends on the buyer’s order size and the vendor’s production rate. The replenishment lead time and the market demand uncertainty are assumed to be reduced by changing the regular production rate of the vendor at the risk of paying additional cost. Shortages are partially backlogged and the backlogging rate depends on the length of the buyer’s replenishment lead time. The proposed model is formulated to obtain the net present value (NPV) of the expected total cost of the integrated system through optimization of (i) the buyer’s order quantity, (2) the buyer’s safety factor, and (3) the vendor’s production rate. Theoretical results are derived to demonstrate the existence and uniqueness of the optimal solution. Through extensive numerical study, some valuable managerial insights are obtained.

A mixed inventory model with variable lead time and random back-order rate

2005 ◽  
Vol 36 (6) ◽  
pp. 329-339 ◽  
Author(s):  
Rómulo I. Zequeira * ◽  
Alfonso Durán ◽  
Gil Gutiérrez
Keyword(s):  
Lead Time ◽  
Inventory Model ◽  
Order Rate ◽  
Back Order
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