Volume 52, Number 4-5, October–December 2018
|Page(s)||1277 - 1293|
|Published online||05 December 2018|
Vendor-buyer integrated production-inventory system for imperfect quality item under trade credit finance and variable setup cost
Department of Mathematics, Indian Institute of Technology Kharagpur,
2 Department of Mathematics, National Institute of Technology Agartala, Agartala 799046, India.
* Corresponding author: email@example.com
Accepted: 31 January 2018
This paper model a vendor-buyer integrated production-inventory system by considering issues of imperfect quality of the item, trade credit finance, setup cost reduction and shortages including partial backlogging and lost sale. The vendor produces a lot in one production setup and sends to the buyer in multiple shipments to fulfill customers’ demand. Due to imperfect production and/or unsafe transportation, the received lot of the buyer contains the imperfect quality of the item, which is detected through the screening process, and is sold at a discounted price in a single batch at the end of the process. To accelerate bulk purchasing, the vendor offers a trade credit period to the buyer to settle the amount. In this regard, we develop a methodology to account the opportunity cost and opportunity gain. Depending upon the screening period μ, trade credit period M, shortage beginning time t and the buyer’s scheduling period T, we consider four cases: (1) M < μ < t < T, (2) μ < M < t < T, (3) μ < t < M < T and (4) μ < t < T < M. The proposed integrated model is testified with numerical experiment and sensitivity analysis by changing the value of key parameters.
Mathematics Subject Classification: 90B05 / 90B30 / 90B50 / 90C31 / 91B06 / 91B38 / 91B42
Key words: Inventory / supply chain / screening / shortage / variable setup cost / trade credit
© EDP Sciences, ROADEF, SMAI 2018
Current usage metrics show cumulative count of Article Views (full-text article views including HTML views, PDF and ePub downloads, according to the available data) and Abstracts Views on Vision4Press platform.
Data correspond to usage on the plateform after 2015. The current usage metrics is available 48-96 hours after online publication and is updated daily on week days.
Initial download of the metrics may take a while.