Optimal lot-sizing integration policy under learning and rework effects in a manufacturer–retailer chain

Tsung-Hui Chen and Yu-Chung Tsao

International Journal of Production Economics, 2014, vol. 155, issue C, 239-248

Abstract: Most research in economic manufacturing/order quantity management assumes that all products are of perfect quality and are produced at a constant production rate. One result of this assumption is that the number of units produced in a given period is constant, which is not the case in real life. Most production systems produce items which are of perfect quality along with some that are of imperfect quality. Defective items, as well as the learning effect, affect production and inventory costs, thereby shaping the performance of the manufacturer–retailer chain. The present study uses the Nash, Stackelberg, and cooperation games to model an imperfect production system to investigate the combined effects of lot-sizing size integration, the learning effect, imperfect production, and the rework process on a manufacturer–retailer channel. This study also demonstrates the optimal properties of the proposed models, develops a search algorithm for obtaining optimal solutions, and conducts a numerical study to seek structural and quantitative insights into the structure of the proposed models. In addition it analyzes the sensitivity of the solutions in relation to the major parameters.

Keywords: Lot-sizing; Defective items; Learning effect; Rework process; Game theory (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0925527314000607
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:155:y:2014:i:c:p:239-248

DOI: 10.1016/j.ijpe.2014.02.011

Access Statistics for this article

International Journal of Production Economics is currently edited by Stefan Minner

More articles in International Journal of Production Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().