Abstract
AbstractNowadays, considering inflation observed in most societies, it is important to investigate on effect of this phenomenon on inventory/production decisions. Consequently, the paper aims to study the influence of inflationary condition on a specific periodic review integrated vendor–buyer inventory system in the presence of vendor’s imperfect manufacturing process. The lead time crashing cost is represented as a piecewise linear function of reduced lead time. In practice, the identification of the protection interval demand distribution of restricted data is a difficult task. As a result, this investigation assumes that the information about the protection interval demand for buyer is limited to its mean and standard deviation. Buyer’s ordering cost can be reduced through further investment. For the discussed model, an effective solution procedure is developed to determine optimal policy. Theorems on conditional convexity and concavity of objective cost function in the decision variables of the respe...
Highlights
In many deterministic or stochastic inventory research papers, one facility is assumed to minimize its own cost or maximize its own profit
Joint expected annual cost and optimal solution In this subsection, we consider the situation where vendor and buyer coordinate their production and inventory strategies to each other to determine their best policy for the periodic review inventory supply chain system
Nowadays, inflation is an observable phenomenon in most societies that its effect in determining optimal policies of inventory/production systems is a momentous concern for inventory managers
Summary
In many deterministic or stochastic inventory research papers, one facility (e.g. a buyer or a vendor) is assumed to minimize its own cost or maximize its own profit. They assume some produced items might not be perfect and first stage inspector of product quality control might make some inspection errors during separation of defective and perfect items In this investigation, the previous literature is extended by considering an integrated vendor– buyer periodic review inventory model under inflationary condition in the presence of vendor’s imperfect manufacturing system. Joint expected annual cost and optimal solution In this subsection, we consider the situation where vendor and buyer coordinate their production and inventory strategies to each other to determine their best policy for the periodic review inventory supply chain system. Fx of the protection interval demand, X), solving Equations (25) and (26), we can find optimal (T, A), and from model (21), we can get the minimum joint expected annual cost with inflation JEACWI(T, A). We can follow the soluq tion procedure below to obtain the suitable k and optimal T, A, L, and M
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