Optimizing an Imperfect Production Model with Varying Setup Cost, Price Discount, and Lead Time Under Fuzzy Demand

Abstract

This article considers the two-tier supply chain based on the single setup multiple delivery (SSMD) policy between a single vendor and a single buyer. The entire production process is performed in a single setup and the logarithmic reduction function is employed to reduce the expense of this setup. As the machine switches from the in-control stage to the out-of-control stage, the output of the manufactured item is found to be defective. Continuous investment has been made to reduce this imperfect production by improving the quality of the item. Furthermore, this model takes into account incomplete product restructuring. In some cases, due to certain issues, such as lead time, the order quantity may not be received on time. The buyer’s lead time duration is controlled by adding the crashing cost. The purpose of this research is to achieve optimum setup cost and defective item percentage with minimum total supply chain cost under a triangular fuzzy demand. Two numerical examples have been considered to evaluate this model. Moreover, sensitivity analysis, graphical representation, and managerial insights are given. Finally, the model obtains the minimum supply chain cost with decision variables as demonstrated by the numerical study.