Economic Design of Acceptance Sampling Plans in a Two-Stage Supply Chain

Lie-Fern Hsu,Jia-Tzer Hsu

doi:10.1155/2012/359082

Abstract

Supply Chain Management, which is concerned with material and information flows between facilities and the final customers, has been considered the most popular operations strategy for improving organizational competitiveness nowadays. With the advanced development of computer technology, it is getting easier to derive an acceptance sampling plan satisfying both the producer's and consumer's quality and risk requirements. However, all the available QC tables and computer software determine the sampling plan on a noneconomic basis. In this paper, we design an economic model to determine the optimal sampling plan in a two-stage supply chain that minimizes the producer's and the consumer's total quality cost while satisfying both the producer's and consumer's quality and risk requirements. Numerical examples show that the optimal sampling plan is quite sensitive to the producer's product quality. The product's inspection, internal failure, and postsale failure costs also have an effect on the optimal sampling plan.

Highlights

Chain Management focuses on the material and information flows between facilities and their final customer, and has been considered the most popular operations strategy for improving organizational competitiveness in the 21st century 1
Some examples of recent product recalls include Toyota’s sticking accelerator pedal recall and floor mat recall e.g., vehicles involved in the sticking accelerator pedal recall include: 2007–2010 Camry, 2009 Camry Hybrid, 2009–2010 Corolla, 2009–2010 RAV4, 2010 Highlander; vehicles involved in the floor mat recall include: 2007–2010 Camry, 2009-2010 Corolla, 2008–2010 Highlander and China’s recent toys, pet food, and melamine milk recalls
We developed a mathematical model for a two-stage supply chain that can help the producer and the consumer to find a single sampling plan that minimizes the producer’s and the consumer’s total quality cost inspection and failure costs and satisfies both the producer’s and consumer’s quality and risk requirements

Summary

Introduction

Chain Management focuses on the material and information flows between facilities and their final customer, and has been considered the most popular operations strategy for improving organizational competitiveness in the 21st century 1. It provides tightened, normal, and reduced plans to be applied for attributes inspection for percent nonconforming or nonconformities per 100 units 4, 5. The producer’s risk Type I error is the probability, for a given sampling plan, of rejecting a lot that has a defect level equal to the AQL. The symbol α is commonly used for the producer’s risk and the typical value for α is 0.05 These attribute acceptance plans set the parameters while assuming the rejected lots are 100 percent inspected and defectives are replaced with nondefectives.

Economic Design of Acceptance Sampling Plan

Numerical Examples and Discussion

Conclusions