Title: Joint optimal production-inventory model with imperfect production processes and varying deterioration rate in buoyant market

Authors: Nita H. Shah, Ajay S. Gor, Chetan Jhaveri

Addresses: Department of Mathematics, Gujarat University, Ahmedabad 380009, India. ' Pramukh Swami Science and H.D. Patel Arts College, Kadi, Gujarat, India. ' S.L. Institute of Business Administration, Ahmedabad 380009, Gujarat, India

Abstract: In this research paper, an inventory model is developed that jointly optimises cost of manufacturer and retailer under buoyant market condition. Inventory in the system at all the stages, that is, raw material, finished goods at manufacturer|s end and finished goods at retailer|s end deteriorate at different rates. Proposed model also considers imperfect production processes. Partial backlogging is allowed only at the retailer|s end. Model considers quadratically increasing demand to reflect the buoyant market condition. Model analytically establishes percentage gain by using integrated policy over independent decisions taken by manufacturer and retailer. At the end, a numerical example is given to illustrate theoretical results obtained. Sensitivity analysis is also carried out to validate theoretical findings.

Keywords: deterioration rate; imperfect production processes; inventory management; joint optimisation; production-inventory modelling; buoyant markets.

DOI: 10.1504/IJOR.2010.035041

International Journal of Operational Research, 2010 Vol.9 No.2, pp.125 - 140

Published online: 01 Sep 2010 *

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