Random misplacement and production process reliability: A sustainable industrial approach to deal with the discrepancy and deficiency

Abstract

<p style='text-indent:20px;'>Inventory inaccuracy emerges as a significant management issue, leading to profit losses within the supply chain network. This study focused on randomly misplaced inventory. Here an integrated inventory model has been constructed with two-stage production with two manufacturing units. The first manufacturer produces semi-finished goods, while the second manufacturer produces the finished items. The reliability becomes a concern if the first manufacturer's production capacity is higher than that of the second one. Hence, process reliability has been considered to make the model more realistic. Proper handling of used products has been considered for sustainability purposes, and these items are either remanufactured or repaired. The manufacturer bears the stock out, and the remanufactured items are supposed to deal with the absence of material. Moreover, as the repairing may be cost-effective while remanufacturing, the manufacturer opts to repair the remaining items and resell them in the secondary market. The discrepancy resulted in a two-way loss to the retailer, as it reduced the product's business accessibility and built up the holding cost of the material. It is investigated with stochastic misplacement at the retailer's end, following the first kind's beta distribution. Idle time costs have also been considered. An analytical approach uses to derive the best policy for the provided model, and the numerical analysis illustrates the managerial perspicacity. The model's limitations have also been discussed, and a linear relationship is built between production cost and minimum selling price using the curve fitting least square method.</p>