An inventory management for global supply chain through reworking of defective items having positive inventory level under multi-trade-credit-period

Waqas Ahmed, Muhammad Jalees, Muhammad Omair (), Zainab Mukhtar and Muhammad Imran
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Waqas Ahmed: National University of Sciences and Technology
Muhammad Jalees: Bahria University
Muhammad Omair: University of Engineering & Technology
Zainab Mukhtar: University of the Punjab
Muhammad Imran: National University of Sciences and Technology

Annals of Operations Research, 2022, vol. 315, issue 1, No 1, 28 pages

Abstract: Abstract Supply chain management is facing serious challenges in the form of imperfections, which cause quality and environmental concerns. The supplier’s manufacturing system may not produce all perfect items and some chances of receiving a lot may include a proportion of imperfect items. It is a time-consuming, negative impact on the environment, and costly activity if the buyer instantly exchanges these defective items with the supplier. These defective products are still economically valuable and can be reworkable. It is more feasible to repair or rework the products at a local repair/service store for saving cost, environment, and time. The repaired products are expected to come back to the buyer when the inventory level is positive. In addition, global purchasing brings superfluous and continuing paybacks, where there are various scenarios when the sellers and buyers are working at a long distance and they are dealing in various businesses by importing and exporting products. Therefore, the supplier also offers a sustainable method of payment to the buyer known as a multi-trade credit period. An inventory model is developed to reduce the on-hand stock, save the environment, and benefit for interim financing. The objective is to optimize the profit of the supply chain by incorporating product reparation policy with the integration of multi-trade-credit policy and shortages simultaneously. A non-derivative approach is utilized to optimize the supply chain mathematical model by deciding the ordering lot size, cycle time, and proportion of backorder demand. The model also used numerical data of the firm to support decision-makers for transforming the proposed supply chain model into real practices. The proposed model has been checked for the sensitivity of various significant supply chain management parameters.

Keywords: Imperfect products; Inventory management; Rework; Multi-trade-credit; Non-derivative approach (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10479-022-04646-y

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