Title: A collaborative supply chain inventory model with defective items, adjusted production rate and variable lead time

Authors: Wakhid Ahmad Jauhari; Nelita Putri Sejati; Cucuk Nur Rosyidi

Addresses: Department of Industrial Engineering, Sebelas Maret University, Jl. Ir Sutami 36 A, Surakarta 57126, Indonesia ' Department of Industrial Engineering, Sebelas Maret University, Jl. Ir Sutami 36 A, Surakarta 57126, Indonesia ' Department of Industrial Engineering, Sebelas Maret University, Jl. Ir Sutami 36 A, Surakarta 57126, Indonesia

Abstract: This paper proposes a production-inventory model for supply chain system consisting of single-vendor and single-buyer. The buyer uses periodic review policy to manage his inventory. The lead time is formulated by considering production time and transportation time. Moreover, the demand in buyer side is assumed to be normally distributed and the shortage is assumed to be fully backordered. The production process maybe deteriorated during production time hence the lot received by the buyer may contain some defective items. The defective rate of the items is assumed to be fixed. The objective of the proposed model is to determine review period, production rate and number of deliveries to minimise the joint total cost. An iterative procedure is proposed for finding the solutions of the model. A numerical example and sensitivity analysis are illustrated to show the model's behaviour.

Keywords: integrated inventory; periodic review; defective items; production rate; supply chain management; SCM; collaborative supply chains; inventory modelling; lead times; inventory management; buyer supplier relationship.

DOI: 10.1504/IJPM.2016.079983

International Journal of Procurement Management, 2016 Vol.9 No.6, pp.733 - 750

Received: 02 Jun 2015
Accepted: 28 Sep 2015

Published online: 24 Sep 2016 *

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