A fuzzy collaborative supply chain inventory model with controllable setup cost and service level constraint for imperfect items Online publication date: Wed, 06-May-2015
by Nughthoh Arfawi Kurdhi; Sri Maria Puji Lestari; Yuliana Susanti
International Journal of Applied Management Science (IJAMS), Vol. 7, No. 2, 2015
Abstract: This paper presents a fuzzy collaborative vendor-buyer production-inventory model under service level constraint. The vendor's production process is imperfect and an order lot may contain a certain number of imperfect items with a known probability density function. This article assumes that setup cost and lead time can be reduced at an investing cost and at a crashing cost, respectively. The fuzzy total joint cost under fuzzy average demand is also considered. In this study, we consider two cases of lead time demand that are normal distribution and distribution free. The objective is to simultaneously optimise the lot size, lead time, reorder point, setup cost and number of shipment in one production cycle, constrained on a service level, such that minimise the total joint cost. In distribution free case, we apply a minimax distribution free procedure to determine the optimal solution. Numerical examples are used to illustrate the benefits of integration.
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