scholarly journals Integrated inventory model involving quality improvement investment and advance-cash-credit payments

2021 ◽  
Author(s):  
Chih-Te Yang ◽  
Chien-Hsiu Huang ◽  
Liang-Yuh Ouyang
Keyword(s):  
Optimal Solution ◽  
Inventory Model ◽  
Decision Makers ◽  
Optimal Solutions ◽  
Order Quantity ◽  
Defective Items ◽  
Numerical Examples ◽  
Proposed Model ◽  
Production Inventory ◽  
Total Profit

This paper investigates the effects of investment and inspection policies on an integrated production–inventory model involving defective items and upstream advance-cash-credit payment provided by the supplier. In this model, retailers offer customers a downstream credit period. Furthermore, the defective rate of the item can be improved through capital co-investment by the supplier and retailer. The objective of this study was to determine the optimal shipping quantity, order quantity, and investment alternatives for maximizing the supply chain's joint total profit per unit time. An algorithm was developed to obtain the optimal solution for the proposed problem. Several numerical examples are used to demonstrate the proposed model and analyze the effects of parameters changes on the optimal solutions. Finally, management implications for relevant decision makers are obtained from the numerical examples.

scholarly journals Inventory Models with Defective Units and Sub-Lot Inspection

Mathematics ◽  
2020 ◽  
Vol 8 (6) ◽  
pp. 1038
Author(s):  
Han-Wen Tuan ◽  
Gino K. Yang ◽  
Kuo-Chen Hung
Keyword(s):  
Lower Bound ◽  
Optimal Solution ◽  
Upper Bounds ◽  
Interior Solution ◽  
Order Quantity ◽  
Inventory Models ◽  
Defective Items ◽  
Numerical Examples ◽  
Counter Example ◽  
Analytical Foundation

Inventory models must consider the probability of sub-optimal manufacturing and careless shipping to prevent the delivery of defective products to retailers. Retailers seeking to preserve a reputation of quality must also perform inspections of all items prior to sale. Inventory models that include sub-lot sampling inspections provide reasonable conditions by which to establish a lower bound and a pair of upper bounds in terms of order quantity. This should make it possible to determine the conditions of an optimal solution, which includes a unique interior solution to the problem of an order quantity satisfying the first partial derivative. The approach proposed in this paper can be used to solve the boundary. These study findings provide the analytical foundation for an inventory model that accounts for defective items and sub-lot sampling inspections. The numerical examples presented in a previous paper are used to demonstrate the derivation of an optimal solution. A counter-example is constructed to illustrate how existing iterative methods do not necessarily converge to the optimal solution.

scholarly journals An Inventory Model for Deteriorating Items with Stock Dependent Demand and Partial Backlogging

2021 ◽  
Vol 9 (12) ◽  
pp. 296-302
Author(s):  
Vikas Kumar
Keyword(s):  
Waiting Time ◽  
Simple Algorithm ◽  
Inventory Model ◽  
Deteriorating Items ◽  
Partial Backlogging ◽  
Numerical Examples ◽  
Proposed Model ◽  
Stock Dependent Demand ◽  
Total Profit ◽  
Dependent Demand

Abstract: In this paper, we formulate a deteriorating inventory model with stock-dependent demand Moreover, it is assumed that the shortages are allowed and partially backlogged, depending on the length of the waiting time for the next replenishment. The objective is to find the optimal replenishment to maximizing the total profit per unit time. We then provide a simple algorithm to find the optimal replenishment schedule for the proposed model. Finally, we use some numerical examples to illustrate the model. Keywords- Inventory, Deteriorating items, Stock dependent demand, Partial backlogging

scholarly journals Integrated multistage supply chain inventory model of multiple retailers with imperfect production and inspection systems

2021 ◽  
Author(s):  
Chi-Jie Lu ◽  
Ming Gu ◽  
Tian-Shyug Lee ◽  
Chih-Te Yang
Keyword(s):  
Supply Chain ◽  
Optimal Solution ◽  
Solution Procedure ◽  
Inventory Model ◽  
Model Complexity ◽  
Supply Chain System ◽  
Imperfect Production ◽  
Proposed Model ◽  
Inspection Systems ◽  
Total Profit

Abstract An integrated multistage supply chain inventory model containing a single manufacturer and multiple retailers is proposed to consider deteriorating materials and finished products with imperfect production and inspection systems. The main purpose is to jointly determine the manufacturer’s production and delivery strategies and the retailers’ replenishment strategies to maximize the integrated total profit. First, the individual total profit functions of the manufacturer and multiple retailers are established and are integrated to form the total profit function of the supply chain system. Then, to address the model complexity, an algorithm is proposed to obtain the optimal solution. Several practical numerical examples are presented to demonstrate the solution procedure, and a sensitivity analysis is performed on the major parameters. From the numerical results, several findings that differ from those in the previous literature were observed. First, retailers with larger market scale, better cost control, and inspection capabilities guarantee higher integrated total profit. Second, increasing the deterioration rates of materials and finished products affect the order quantity of materials in various ways. Third, the manufacturer’s shipping strategy is rigid and not easily adjusted in the proposed model. The performance of the proposed model has several meaningful management implications.

On Optimal Inventory Model for Obsolescence Perishable Products under Unpermitted-Stockout

2011 ◽  
Vol 201-203 ◽  
pp. 1292-1295
Author(s):  
Xiao Liang Xie
Keyword(s):  
Optimal Solution ◽  
Inventory Model ◽  
Economic Order Quantity ◽  
Inventory Level ◽  
Order Quantity ◽  
Short Life ◽  
Numerical Examples ◽  
Fast Change ◽  
Demand Rate ◽  
Long Life

With the advancement of science and technology and the fast change of buyer requirements, the short-life products have been shortened at large, some formerly long-life products gradually turn to value deterioration products. The ratio of value deterioration products to modern products is getting higher and higher. This paper develops a deterministic economic order quantity EOQ inventory model, where the demand rate depends on the on-hand inventory when inventory level exceeds certain quantity , otherwise the demand rate is constant. The effects of obsolescence are taken into account, for it is related to the demand rate. The results are discussed through two numerical examples. A sensitivity analysis of the optimal solution with respect to parameters of the system is carried out.

Imprecise Inventory Model for Items With Imperfect Quality Subject to Learning Effects Having Shortages

2018 ◽  
pp. 284-304
Author(s):  
Sumana Saha ◽  
Tripti Chakrabarti
Keyword(s):  
Optimal Solution ◽  
Inventory Model ◽  
Extension Principle ◽  
Market Demand ◽  
Screening Process ◽  
Defective Items ◽  
Inventory Costs ◽  
Eoq Model ◽  
Proposed Model ◽  
Holding Cost

The fundamental assumption of an economic order quantity (EOQ) model is that 100% of items in an ordered lot are perfect. This assumption is not always pertinent for production processes because of process deterioration or other factors. This paper develops an EOQ model for that each ordered lot contains some defective items and shortages backordered. Here, an inventory model is developed to deal the impreciseness present in market demand. It is assumed that the received items are not of perfect quality and after screening, imperfect items are withdrawn from inventory and sold at discounted price. However, in practice, errors occur in screening test. So, the screening process fails to be perfect. Due to acquaintance with handling methodology and system, holding cost and ordering cost are gradually decreases from one shipment to another. So, learning effect is incorporated on holding cost, ordering cost and number of defective items present in each lot. Due to impreciseness in market demand and in different inventory costs, profit expression is fuzzy in nature. To fuzzify the profit expression, Extension Principle is used and for defuzzification Signed distance method is applied. Finally, the feasibility of proposed model and the effect of learning on optimal solution are shown through numerical example.

scholarly journals Impact of defective items on (Q, r, L) inventory model involving controllable setup cost

2004 ◽  
Vol 14 (2) ◽  
pp. 247-258 ◽  
Author(s):  
Bor-Ren Chuang ◽  
Liang-Yuh Ouyang ◽  
Yu-Jen Lin
Keyword(s):  
Normal Distribution ◽  
Lead Time ◽  
Optimal Solution ◽  
Inventory Model ◽  
Decision Variable ◽  
Order Quantity ◽  
Setup Cost ◽  
Defective Items ◽  
Reorder Point

In a recent paper, Ouyang et al. [10] proposed a (Q, r, L) inventory model with defective items in an arrival lot. The purpose of this study is to generalize Ouyang et al.?s [10] model by allowing setup cost (A) as a decision variable in conjunction with order quantity (Q), reorder point (r) and lead time (L). In this study, we first assume that the lead time demand follows a normal distribution, and then relax this assumption by only assuming that the first two moments of the lead time demand are given. For each case, an algorithm procedure of finding the optimal solution is developed.

scholarly journals Ordering Cost Reduction in Inventory Model with Defective Items and Backorder Price Discount

2014 ◽  
Vol 2014 ◽  
pp. 1-14 ◽  
Author(s):  
Karuppuchamy Annadurai ◽  
Ramasamy Uthayakumar
Keyword(s):  
Cost Reduction ◽  
Optimal Solution ◽  
Computer Code ◽  
Inventory Model ◽  
Inventory Models ◽  
Price Discount ◽  
Defective Items ◽  
Numerical Examples ◽  
Ordering Cost Reduction ◽  
Real Market

In the real market, as unsatisfied demands occur, the longer the length of lead time is, the smaller the proportion of backorder would be. In order to make up for the inconvenience and even the losses of royal and patient customers, the supplier may offer a backorder price discount to secure orders during the shortage period. Also, ordering policies determined by conventional inventory models may be inappropriate for the situation in which an arrival lot contains some defective items. To compensate for the inconvenience of backordering and to secure orders, the supplier may offer a price discount on the stockout item. The purpose of this study is to explore a coordinated inventory model including defective arrivals by allowing the backorder price discount and ordering cost as decision variables. There are two inventory models proposed in this paper, one with normally distributed demand and another with distribution free demand. A computer code using the software Matlab 7.0 is developed to find the optimal solution and present numerical examples to illustrate the models. The results in the numerical examples indicate that the savings of the total cost are realized through ordering cost reduction and backorder price discount.

The economic order quantity model with inspection policy of zero-defect single sampling

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahdi Nakhaeinejad
Keyword(s):  
Sample Size ◽  
Inventory Management ◽  
Optimal Solution ◽  
Random Variable ◽  
Solution Procedure ◽  
Order Quantity ◽  
Content Type ◽  
Numerical Examples ◽  
Proposed Model ◽  
Inspection Policy

PurposeThis paper proposes a new inventory model with inspection policy because in practice the received orders may contain non- conforming (NC) items. So, a buyer who receive an order from a supplier should use an inspection policy.Design/methodology/approachThe inspection policy is assumed to be zero-defect single sampling. Under this policy a lot is accepted only if no defect has been identified in the inspected sample. The fraction of NC is assumed to be a random variable following a Binomial distribution and the number of NC items detected by inspection assumed to be a random variable, which follows a hypergeometric distribution. Order quantity and sample size are the two decision variables. A solution procedure is presented for the proposed model. The proposed procedure presents the optimal solution.FindingsNumerical examples presented to illustrate the procedure outlined for the proposed model and its applicability. The results of numerical examples and comparing them with traditional EOQ model reveal that by the proposed model, the buyer could reduce total cost that shows the efficiency and validity of the proposed model.Originality/valueThe novelty of this paper is the new proposed model that considers inspection policy in inventory management. The proposed model determines sample size as well as order quantity to consider both subject of inventory management and quality control, simultaneously.

scholarly journals Optimal inventory policies for imperfect inventory with price dependent stochastic demand and partially backlogged shortages

2012 ◽  
Vol 22 (2) ◽  
pp. 199-223 ◽  
Author(s):  
Jhuma Bhowmick ◽  
G.P. Samanta
Keyword(s):  
Stochastic Demand ◽  
Optimal Order ◽  
Partial Backlogging ◽  
Order Quantity ◽  
Inventory Policies ◽  
Defective Items ◽  
Proposed Model ◽  
Special Cases ◽  
Total Profit ◽  
Increasing Function

The paper investigates a single period imperfect inventory model with price dependent stochastic demand and partial backlogging. The backorder rate is a nonlinear non-increasing function of the magnitude of shortage. Two special cases are considered assuming that the percentage of defective items follows a truncated exponential distribution and a normal distribution respectively. The optimal order quantity and the optimal mark up value are determined such that the expected total profit of the system is maximized. Numerical example is given to illustrate the proposed model which is compared with the traditional model of perfect stock. Sensitivity analysis is performed to explain the behavior of the proposed model with respect to the key parameters.

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