An integrated inventory model for supplier-manufacturer-retailer system with imperfect quality and inspection errors
by Wakhid Ahmad Jauhari; Amanda Sofiana; Nughthoh Arfawi Kurdhi; Pringgo Widyo Laksono
International Journal of Logistics Systems and Management (IJLSM), Vol. 24, No. 3, 2016

Abstract: This paper develops an integrated inventory model for a three-stage supply chain system consisting of single-supplier, single-manufacturer, and single-retailer. The demand is deterministic and the production process is imperfect and produces a certain number of defective items. The retailer conducts an inspection process to screen out the defective items from the shipment lot. The inspector may incorrectly classify non-defective item as defective or incorrectly classify a defective item as non-defective. This model provides an optimal solution for the expected integrated total annual cost. A numerical example is presented for illustrative purpose.

Online publication date: Mon, 06-Jun-2016

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