A producer-retailer incorporated multi-item EPQ problem with delayed differentiation, the expedited rate for common parts, multi-delivery and scrap

Abstract

Transnational producers facing the present-day competitive global supply-chain environments need to pursue the most appropriate manufacturing scheme, quality screening task, and stock shipping plan to satisfy customer’s timely multi-item requirements under minimum overall product fabrication-delivery expenses. This study develops a producer-retailer incorporated multi-item two-stage economic production quantity- (EPQ-) based system with delayed differentiation, expedited-rate for common parts, multiple deliveries plan, and random scrap. It aims to assist current manufacturing firms in achieving the aforementioned operating goals. Mathematical methods help us build an analytical model to explicitly portray the studied problem’s features and derive its overall system expenses. Hessian matrix equations and optimization approaches help us prove convexity and derive the cost-minimized fabrication- delivery decision. This study gives a simulated example to illustrate the research outcome’s applicability and the proposed model’s capabilities numerically. Consequently, diverse crucial information becomes obtainable to the manufacturers to facilitate various operating decision makings as follows: (i) the cost-minimized fabrication-delivery policy; (ii) the behavior of system’s overall expenses and operating policy regarding mean scrap rate, and different relationships between common part’s values and completion-rate; (iii) the system’s detailed cost components; (iv) the system’s overall expenses, utilization, and common part’s uptime concerning different common part’s expedited rates; and (v) the collective effects of critical system features on the overall expenses, uptime, and optimal cycle length, etc.