Optimal sampling policies in a centralised supply chain with demands affected by product quality Online publication date: Sun, 25-Apr-2010
by Konstantin Kogan, Sheldon Lou, Dana Sherill-Rofe
International Journal of Management and Network Economics (IJMNE), Vol. 1, No. 4, 2009
Abstract: We address a quality control problem frequently encountered in multi-stage pharmaceutical supply chains transporting drugs from a producer to a wholesaler and eventually to retailers (pharmacies). Depending on the transportation modes and storage methods used, the stages may expose the drugs to hostile environments, such as extreme temperatures, which may impact the quality. To study the performance of such a supply chain, we incorporate the effect of quality on demand with the Neyman–Pearson statistical framework. We show that in a centralised supply chain the optimal inspection strategies for the parties depend on parameters, which signify the relative importance of price and the impact of quality on demand. In particular, we find that the ratio between the customer demand under perfect product quality and the customer sensitivity to quality plays a critical role in selecting optimal inspection policies.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Management and Network Economics (IJMNE):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com