Synergic Effect of Reworking for Imperfect Quality Items with the Integration of Multi-Period Delay-in-Payment and Partial Backordering in Global Supply Chains

Abstract

Abstract In intercontinental trade and economics goods are bought from a global supplier. On occasion, the expected lot may include a fraction of defective items. These imperfect items still have worth and can be sold to customers after repair. It is cost-effective and sustainable to rework such items in nearby repair workshops rather than return them. The reworked items can be returned from the workshop to the buyer when shortages are equal to the quantity of imperfect items. In the meantime, the supplier correspondingly deals a multi-period delay-in-payments strategy with purchaser. The entire profit has been maximized with paybacks for interim financing. This study aims to develop a synergic inventory model to get the most profit by making an allowance for reworking, multi-period delay-in-payments policy, and shortages. The findings of the proposed model augment inventory management performance by monitoring cycle time as well as fraction of phase with optimistic inventory for a supply chain. The results demonstrate that profit is smaller if the permitted period given by supplier to buyer is equal to or greater than the cycle time, and profit is greater if the permitted period is smaller than the cycle time. The algebraic method is engaged to make a closed system optimum solution. The mathematical experiment of this study is constructed to provide management insights and tangible practices.