The modified optimum profit model with/without product warranty period under the imperfect quality, single supplier, and multi-retailers

Abstract

In this study, the author proposes a modified Chen and Liu’s [1] pure procurement model with/without product warranty period under the imperfect quality, single supplier and multi-retailers. The 100% inspection for the supplier’s product is executed. The conformance product is sold to the retailers and the non-conformance one is scrapped and sold at a lower price. Taguchi’s quadratic quality loss function is applied in measuring the product quality. The optimum supplier’s wholesale price, process mean, and product warranty period and each retailer’s economic order quantity will be jointly determined under the maximum expected total profit including the supplier and retailers.