Optimal production lot size under backup agreement allowing substitute products

2020 ◽  
Vol 54 (5) ◽  
pp. 1309-1326
Author(s):  
Wen-Chin Tsai ◽  
Chih-Hsiung Wang

In the fashion industry, a flexible backup agreement contract allows the retailer to order a partial amount from the backup quantity to allay the risk of uncertain market demand. However, under such a contract, the manufacturer faces the risk of bearing a huge leftover if the quantity realized by the retailer in backup is small. Accordingly, the present study considers a modified backup agreement in which the manufacturer is permitted to urgently purchase substitute products to satisfy the backup order from a third-party supplier, but at a unit purchase cost greater than the original unit manufacturing cost. The corresponding expected total profit function for the manufacturer is established and shown to be concave. The profit function is used to explore various useful properties for determining the optimal production lot size. In addition, an illustrated numerical example is provided to analyze the impact of the backup contract terms on the optimal production lot size and manufacturer’s profit.

Kybernetes ◽  
2019 ◽  
Vol 49 (5) ◽  
pp. 1533-1560
Author(s):  
Xinfeng Lai ◽  
Zhixiang Chen ◽  
Bhaba R. Sarker

Purpose The purpose of this paper is to study a production lot sizing problem with consideration of imperfect manufacturing and emergency maintenance policy, providing managerial implication for practitioners. Design/methodology/approach In this study, the authors introduce two models, where in Model I, shortages are not allowed and repair times are negligible. In Model II, shortages are allowed and are partially backlogged, and repair times are assumed to be exponentially distributed, algorithm is developed to solve the models, numerical examples were demonstrated the applications. Findings Results show that in the Model I, demand rate is the most significant parameter affecting the average expected cost, whereas the time needed to breakdown after machine shift is the most significant factor affecting the production lot size. Therefore, reduction in the time needed to breakdown after machine shift would be helpful for determining an appropriate production lot size in Model I. In Model II, repair time parameter is the most significant factor affecting the average expected cost. Reducing the value of machine shift parameter would be helpful for determining an adequate production lot size and reducing decision risk. Practical implications This paper can provide important reference value for practitioners with managerial implication of how to effectively maintain equipment, i.e. how to make product lot size considering the influence of the maintenance policy. Originality/value From the aspect of academia, this paper provides a solution to the optimal production lot sizing decision for an imperfect manufacturing system with consideration of machine breakdown and emergency maintenance, which is a supplement to imperfect EMQ model.


2021 ◽  
Vol 13 ◽  
pp. 184797902199927
Author(s):  
Firas M Tuffaha ◽  
Mohammad M AlDurgam

It is common in the integrated targeting inventory literature to assume 100% inspection. Yet, sampling inspection is still a valid alternative in numerous situations. Inspection time has been assumed negligible in the literature of integrated inventory and sampling inspection. Neglecting inspection time is unrealistic, especially when rejected lots are sent for 100% inspection. This research work integrates process targeting, production lot-sizing and inspection. Given a scenario of a producer and distributer, the objective is to determine the optimal mean setting at the producer, the production lot size to be produced and shipped to the distributor and the reorder point at the distributor under a given sampling inspection plan. To the best of the authors’ knowledge, sampling inspection and its associated costs are rarely addressed in integrated supply chain models, and have never been addressed in integrated models with controllable production rates. Numerical illustrations using an efficient solution technique are presented to highlight the impact of various model parameters. The results indicated that inspection time has a significant impact on the total cost of the developed model, especially, when tightened inspection plans are used.


Author(s):  
Lily N Edwards-Callaway ◽  
M Caitlin Cramer ◽  
Caitlin N Cadaret ◽  
Elizabeth J Bigler ◽  
Terry E Engle ◽  
...  

ABSTRACT Shade is a mechanism to reduce heat load providing cattle with an environment supportive of their welfare needs. Although heat stress has been extensively reviewed, researched, and addressed in dairy production systems, it has not been investigated in the same manner in the beef cattle supply chain. Like all animals, beef cattle are susceptible to heat stress if they are unable to dissipate heat during times of elevated ambient temperatures. There are many factors that impact heat stress susceptibility in beef cattle throughout the different supply chain sectors, many of which relate to the production system, i.e. availability of shade, microclimate of environment, and nutrition management. The results from studies evaluating the effects of shade on production and welfare are difficult to compare due to variation in structural design, construction materials used, height, shape, and area of shade provided. Additionally, depending on operation location, shade may or may not be beneficial during all times of the year, which can influence the decision to make shade a permanent part of management systems. Shade has been shown to lessen the physiologic response of cattle to heat stress. Shaded cattle exhibit lower respiration rates, body temperatures, and panting scores compared to un-shaded cattle in weather that increases the risk of heat stress. Results from studies investigating the provision of shade indicate that cattle seek shade in hot weather. The impact of shade on behavioral patterns is inconsistent in the current body of research, some studies indicating shade provision impacts behavior and other studies reporting no difference between shaded and un-shaded groups. Analysis of performance and carcass characteristics across feedlot studies demonstrated that shaded cattle had increased ADG, improved feed efficiency, HCW, and dressing percentage when compared to cattle without shade. Despite the documented benefits of shade, current industry statistics, although severely limited in scope, indicate low shade implementation rates in feedlots and data in other supply chain sectors do not exist. Industry guidelines and third party on-farm certification programs articulate the critical need for protection from extreme weather but are not consistent in providing specific recommendations and requirements. Future efforts should include: updated economic analyses of cost versus benefit of shade implementation, exploration of producer perspectives and needs relative to shade, consideration of shade impacts in the cow-calf and slaughter plant segments of the supply chain, and integration of indicators of affective (mental) state and preference in research studies to enhance the holistic assessment of cattle welfare.


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