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Optimizing pricing, replenishment and rework decision for imperfect and deteriorating items in a manufacturer-retailer channel

Tsung-Hui Chen

International Journal of Production Economics, 2017, vol. 183, issue PB, 539-550

Abstract: In an imperfect manufacturing system, the production cost, inventory holding cost, and the performance of the supply chain are usually affected by imperfect items. Many studies focus on developing inspection and rework models for an imperfect manufacturing system, but few develop models for deteriorating items. The present study deals with the imperfect manufacturing system problem using the case of a two-echelon supply chain consisting of one manufacturer and one retailer. The non-cooperation and cooperation policies were used to investigate the combined effects of the pricing scheme, the replenishment program, imperfect quality, and the rework process for the deteriorating items. Several numerical studies have shown the effects of changing parameters on decision-making, and the sensitivity of profit improvement on the whole channel.

Keywords: Pricing; Rework process; Imperfection quality; Deteriorating items; Supply chain management (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:proeco:v:183:y:2017:i:pb:p:539-550