Volume 55, Number 6, November-December 2021
|Page(s)||3459 - 3491|
|Published online||25 November 2021|
A single-manufacturer multi-retailer integrated inventory model for items with imperfect quality, price sensitive demand and planned back orders
Department of Mathematics, Sidho-Kanho-Birsha University, Purulia 723104, India
* Corresponding author: firstname.lastname@example.org
Accepted: 11 October 2021
In this paper, we develop an integrated two-echelon supply chain inventory model with a single-manufacturer and multi-retailers in which each retailer’s demand is dependent on selling price of the product. The manufacturer produces a single product and dispatched the order quantities of the retailers in some equal batches. The production process is imperfect and produces imperfect quality of products with a defective percentage which is random in nature and follows binomial distribution. Inspection process is performed by the retailers to classify the defective items in each lot delivered from the manufacturer. The defective items that were found by the retailer will be returned to the manufacturer at the next delivery. Lead time is random and it follows an exponential distribution. We also assume that shortages are allowed and are completely backlogged at each retailer’s end. A closed form solution to maximize the expected average profit for both the centralized and the decentralized scenarios are obtained. The developed models are illustrated with the help of some numerical examples using stochastic search genetic algorithm (GA). It is found that integration of the supply chain players results an impressive increment in the profit of the whole supply chain. Sensitivity analysis is also performed to explore the impacts of key-model parameters on the expected average profit of the supply chain.
Mathematics Subject Classification: 90B05
Key words: Two-echelon supply chain / Single-manufacturer / Multi-retailers / Imperfect quality items / Price dependent demand / Stochastic lead time / Genetic algorithm
© The authors. Published by EDP Sciences, ROADEF, SMAI 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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