The Effect of Unreliable Machine for Two Echelons Deteriorating Inventory Model

I Nyoman Sutapa,I Gede Agus Widyadana

doi:10.9744/jti.16.2.107-112

Abstract

Many researchers have developed two echelons supply chain, however only few of them consider deteriorating items and unreliable machine in their models In this paper, we develop an inventory deteriorating model for two echelons supply chain with unreliable machine. The unreliable machine time is assumed uniformly distributed. The model is solved using simple heuristic since a closed form model can not be derived. A numerical example is used to show how the model works. A sensitivity analysis is conducted to show effect of different lost sales cost in the model. The result shows that increasing lost sales cost will increase both manufacture and buyer costs however buyer’s total cost increase higher than manufacture’s total cost as manufacture’s machine is more unreliable.

Highlights

Economic production quantity (EPQ) for deteriorating items models have been developed intensively since the first model was developed by Misra [1]
We extend the work of Wee and Widyadana [6] by considering deteriorating items and lost sales
A simple heuristic method is used to solve the model since a closed form solution can not be derived

Summary

Introduction

Economic production quantity (EPQ) for deteriorating items models have been developed intensively since the first model was developed by Misra [1]. The first model was very simple and had many assumptions such as constant demand and perfect production process. Many researchers try to make the model more realistic by considering unreliable production process. Zequeira et al [2] developed a model to optimize maintenance policy and buffer inventory. They assumed that manufacturing policy is not reliable and need to be maintained. Buffer need to be provided to satisfy demand during the interruption period

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Results

Conclusion