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.
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