The joint determination of process mean, quality investment, replenishment cycle time, and credit period for the integrated supply chain model

Abstract

In this work, the authors proposes the modified Banu and Mondal’s model for obtaining the optimal process mean, quality investment, replenishment cycle time, and trade credit period. Assume that the product quality is normally distributed with unknown process mean and known standard deviation. The product is considered under the larger-the-better characteristic. The declining exponential reduction of process standard deviation is the function of quality investment. Numerical results show that (1) the production cost per item and the parameter of quality investment function for the process standard deviation have the effect on the process mean; (2) the production cost per item, the non-conforming cost per item, the parameter of quality investment function for the process standard deviation and the known process standard deviation have the major effect on the quality investment; (3) the production cost per item has the effect on the retailer’s replenishment cycle time; (4) the production cost per item has the major effect on the expected total profit including the manufacturer and the retailer per unit time.