ECONOMIC REPLENISHMENT PLAN WITH IMPERFECT PRODUCTION PROCESS AND BUSINESS-RETURN DEPENDENT DEMAND

Chun-Jen Chung () and Hui-Ming Wee ()
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Chun-Jen Chung: Department of Information Application, Aletheia University, Pei-ShihLi, Matou, Tainan 72147, Taiwan, ROC
Hui-Ming Wee: Department of Industrial and Systems Engineering, Chung Yuan Christian University, Chungli 32023, Taiwan, ROC

Asia-Pacific Journal of Operational Research (APJOR), 2012, vol. 29, issue 06, 1-32

Abstract: This study considers the supplier's warranty return and the buyer's rebate policy as business-return policy in the supplier–buyer supply chain. The policy as well as the displayed stock level influences the behavior of the buyer. Distinct from the traditional single-stage inventory model, we investigate a two-stage replenishment policy model for deteriorating item considering the effect of imperfect production process, product design, stock level and business-return. A mathematical model utilizing the time weighted inventory (TWI) approach and two-variables fixed point optimization technique is developed to derive the optimal inspection starting time, the number of deliveries, the optimal delivery-time interval and the optimal business-return period. A numerical example is presented to illustrate the model developed. The result shows that the fixed demand rate, the unit holding cost and the unit inspection cost are the critical factors affecting the scheduling and performance of the two-stage supply chain.

Keywords: Supply chain; deteriorating items; business-return dependent demand; imperfect production process; incentive policy (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S0217595912500364

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