IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v241y2021ics0925527321002310.html
   My bibliography  Save this article

Joint quality and pricing decisions in lot sizing models with defective items

Author

Listed:
  • Hauck, Zsuzsanna
  • Rabta, Boualem
  • Reiner, Gerald

Abstract

We investigate joint pricing and quality decisions in a lot sizing model for a single product with imperfect quality. We assume that the company performs an exhaustive quality inspection and discards the defective items detected before the demand is fulfilled. Unlike most of the literature, the time spent on the screening is considered as a decision variable which affects both the screening cost and the proportion of the defects which can be detected. The screening cost and the detection rate are general functions of the screening time to express the cost and efficiency of different detection methods. Additionally, consumer behaviour is considered by the use of a price and quality dependent demand function.

Suggested Citation

  • Hauck, Zsuzsanna & Rabta, Boualem & Reiner, Gerald, 2021. "Joint quality and pricing decisions in lot sizing models with defective items," International Journal of Production Economics, Elsevier, vol. 241(C).
    • Handle: RePEc:eee:proeco:v:241:y:2021:i:c:s0925527321002310
    DOI: 10.1016/j.ijpe.2021.108255
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527321002310
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2021.108255?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ittner, CD & Larcker, DF, 1998. "Are nonfinancial measures leading indicators of financial performance? An analysis of customer satisfaction," Journal of Accounting Research, Wiley Blackwell, vol. 36, pages 1-35.
    2. Farooq, Muhammad Arsalan & Kirchain, Randolph & Novoa, Henriqueta & Araujo, Antonio, 2017. "Cost of quality: Evaluating cost-quality trade-offs for inspection strategies of manufacturing processes," International Journal of Production Economics, Elsevier, vol. 188(C), pages 156-166.
    3. Yuan, Guanghui & Han, Jingti & Wang, YaQiong & liang, Hejun & Li, GangYuan, 2019. "The product demand model driven by consumer’s information perception and quality perception," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 535(C).
    4. San-José, Luis A. & Sicilia, Joaquín & Alcaide-López-de-Pablo, David, 2018. "An inventory system with demand dependent on both time and price assuming backlogged shortages," European Journal of Operational Research, Elsevier, vol. 270(3), pages 889-897.
    5. Abad, P. L. & Aggarwal, Vijay, 2005. "Incorporating transport cost in the lot size and pricing decisions with downward sloping demand," International Journal of Production Economics, Elsevier, vol. 95(3), pages 297-305, March.
    6. Jalali, Hamed & Carmen, Raïsa & Van Nieuwenhuyse, Inneke & Boute, Robert, 2019. "Quality and pricing decisions in production/inventory systems," European Journal of Operational Research, Elsevier, vol. 272(1), pages 195-206.
    7. Hauck, Zsuzsanna & Vörös, József, 2015. "Lot sizing in case of defective items with investments to increase the speed of quality control," Omega, Elsevier, vol. 52(C), pages 180-189.
    8. Buzzell, Robert D., 2004. "The PIMS program of strategy research: A retrospective appraisal," Journal of Business Research, Elsevier, vol. 57(5), pages 478-483, May.
    9. Wu, Jiang & Chang, Chun-Tao & Teng, Jinn-Tsair & Lai, Kuei-Kuei, 2017. "Optimal order quantity and selling price over a product life cycle with deterioration rate linked to expiration date," International Journal of Production Economics, Elsevier, vol. 193(C), pages 343-351.
    10. Rajiv D. Banker & Inder Khosla & Kingshuk K. Sinha, 1998. "Quality and Competition," Management Science, INFORMS, vol. 44(9), pages 1179-1192, September.
    11. Khan, M. & Jaber, M.Y. & Guiffrida, A.L. & Zolfaghari, S., 2011. "A review of the extensions of a modified EOQ model for imperfect quality items," International Journal of Production Economics, Elsevier, vol. 132(1), pages 1-12, July.
    12. Voros, Jozsef, 2019. "An analysis of the dynamic price-quality relationship," European Journal of Operational Research, Elsevier, vol. 277(3), pages 1037-1045.
    13. Jaber, Mohamad Y. & Zanoni, Simone & Zavanella, Lucio E., 2014. "Economic order quantity models for imperfect items with buy and repair options," International Journal of Production Economics, Elsevier, vol. 155(C), pages 126-131.
    14. Salameh, M. K. & Jaber, M. Y., 2000. "Economic production quantity model for items with imperfect quality," International Journal of Production Economics, Elsevier, vol. 64(1-3), pages 59-64, March.
    15. De Maeyer, Peter & Estelami, Hooman, 2011. "Consumer perceptions of third party product quality ratings," Journal of Business Research, Elsevier, vol. 64(10), pages 1067-1073, October.
    16. Khan, Mehmood & Jaber, Mohamad Y. & Bonney, Maurice, 2011. "An economic order quantity (EOQ) for items with imperfect quality and inspection errors," International Journal of Production Economics, Elsevier, vol. 133(1), pages 113-118, September.
    17. Ramasesh, Ranga V., 2010. "Lot-sizing decisions under limited-time price incentives: A review," Omega, Elsevier, vol. 38(3-4), pages 118-135, June.
    18. Urban, Timothy L. & Baker, R. C., 1997. "Optimal ordering and pricing policies in a single-period environment with multivariate demand and markdowns," European Journal of Operational Research, Elsevier, vol. 103(3), pages 573-583, December.
    19. Hsieh, Tsu-Pang & Dye, Chung-Yuan, 2017. "Optimal dynamic pricing for deteriorating items with reference price effects when inventories stimulate demand," European Journal of Operational Research, Elsevier, vol. 262(1), pages 136-150.
    20. Pan, Xiaojun & Li, Shoude, 2016. "Dynamic optimal control of process–product innovation with learning by doing," European Journal of Operational Research, Elsevier, vol. 248(1), pages 136-145.
    21. Feng, Lin & Chan, Ya-Lan & Cárdenas-Barrón, Leopoldo Eduardo, 2017. "Pricing and lot-sizing polices for perishable goods when the demand depends on selling price, displayed stocks, and expiration date," International Journal of Production Economics, Elsevier, vol. 185(C), pages 11-20.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guo, Xiongfei & Chen, Jing, 2023. "Manufacturer’s quality improvement and Retailer’s In-store service in the presence of customer returns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 177(C).
    2. Hauck, Zsuzsanna & Rabta, Boualem & Reiner, Gerald, 2023. "Coordinating quality decisions in a two-stage supply chain under buyer dominance," International Journal of Production Economics, Elsevier, vol. 264(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Feng, Lin & Wang, Wan-Chih & Teng, Jinn-Tsair & Cárdenas-Barrón, Leopoldo Eduardo, 2022. "Pricing and lot-sizing decision for fresh goods when demand depends on unit price, displaying stocks and product age under generalized payments," European Journal of Operational Research, Elsevier, vol. 296(3), pages 940-952.
    2. Leopoldo Eduardo Cárdenas-Barrón & María José Lea Plaza-Makowsky & María Alejandra Sevilla-Roca & José María Núñez-Baumert & Buddhadev Mandal, 2021. "An Inventory Model for Imperfect Quality Products with Rework, Distinct Holding Costs, and Nonlinear Demand Dependent on Price," Mathematics, MDPI, vol. 9(12), pages 1-20, June.
    3. Feng, Lin & Chan, Ya-Lan, 2019. "Joint pricing and production decisions for new products with learning curve effects under upstream and downstream trade credits," European Journal of Operational Research, Elsevier, vol. 272(3), pages 905-913.
    4. Naoufel Cheikhrouhou & Biswajit Sarkar & Baishakhi Ganguly & Asif Iqbal Malik & Rafael Batista & Young Hae Lee, 2018. "Optimization of sample size and order size in an inventory model with quality inspection and return of defective items," Annals of Operations Research, Springer, vol. 271(2), pages 445-467, December.
    5. Khan, Mehmood & Hussain, Matloub & Saber, Hussein M., 2016. "Information sharing in a sustainable supply chain," International Journal of Production Economics, Elsevier, vol. 181(PA), pages 208-214.
    6. Feng, Lin & Teng, Jinn-Tsair & Zhou, Fangting, 2023. "Pricing and lot-sizing decisions on buy-now-and-pay-later installments through a product life cycle," European Journal of Operational Research, Elsevier, vol. 306(2), pages 754-763.
    7. Li, Ruihai & Liu, YuPing & Teng, Jinn-Tsair & Tsao, Yu-Chung, 2019. "Optimal pricing, lot-sizing and backordering decisions when a seller demands an advance-cash-credit payment scheme," European Journal of Operational Research, Elsevier, vol. 278(1), pages 283-295.
    8. Hsu, Jia-Tzer & Hsu, Lie-Fern, 2013. "An EOQ model with imperfect quality items, inspection errors, shortage backordering, and sales returns," International Journal of Production Economics, Elsevier, vol. 143(1), pages 162-170.
    9. Harun Öztürk, 2019. "Modeling an inventory problem with random supply, inspection and machine breakdown," OPSEARCH, Springer;Operational Research Society of India, vol. 56(2), pages 497-527, June.
    10. Anton, Ramona & Chenavaz, Régis Y. & Paraschiv, Corina, 2023. "Dynamic pricing, reference price, and price-quality relationship," Journal of Economic Dynamics and Control, Elsevier, vol. 146(C).
    11. Ata Allah Taleizadeh & Sara Tavassoli & Arijit Bhattacharya, 2020. "Inventory ordering policies for mixed sale of products under inspection policy, multiple prepayment, partial trade credit, payments linked to order quantity and full backordering," Annals of Operations Research, Springer, vol. 287(1), pages 403-437, April.
    12. Taleizadeh, Ata Allah & Khanbaglo, Mahboobeh Perak Sari & Cárdenas-Barrón, Leopoldo Eduardo, 2016. "An EOQ inventory model with partial backordering and reparation of imperfect products," International Journal of Production Economics, Elsevier, vol. 182(C), pages 418-434.
    13. Muhammad Tayyab & Biswajit Sarkar & Bernardo Nugroho Yahya, 2018. "Imperfect Multi-Stage Lean Manufacturing System with Rework under Fuzzy Demand," Mathematics, MDPI, vol. 7(1), pages 1-18, December.
    14. Hauck, Zsuzsanna & Vörös, József, 2015. "Lot sizing in case of defective items with investments to increase the speed of quality control," Omega, Elsevier, vol. 52(C), pages 180-189.
    15. Javad Asadkhani & Hadi Mokhtari & Saman Tahmasebpoor, 2022. "Optimal lot-sizing under learning effect in inspection errors with different types of imperfect quality items," Operational Research, Springer, vol. 22(3), pages 2631-2665, July.
    16. Björk, Kaj-Mikael, 2012. "A multi-item fuzzy economic production quantity problem with a finite production rate," International Journal of Production Economics, Elsevier, vol. 135(2), pages 702-707.
    17. Mehmood Khan & Matloub Hussain & Leopoldo Eduardo Cárdenas-Barrón, 2017. "Learning and screening errors in an EPQ inventory model for supply chains with stochastic lead time demands," International Journal of Production Research, Taylor & Francis Journals, vol. 55(16), pages 4816-4832, August.
    18. Konstantaras, I. & Skouri, K. & Lagodimos, A.G., 2019. "EOQ with independent endogenous supply disruptions," Omega, Elsevier, vol. 83(C), pages 96-106.
    19. Skouri, K. & Konstantaras, I. & Lagodimos, A.G. & Papachristos, S., 2014. "An EOQ model with backorders and rejection of defective supply batches," International Journal of Production Economics, Elsevier, vol. 155(C), pages 148-154.
    20. S. Rajeswari & C. Sugapriya & D. Nagarajan, 2022. "An analysis of uncertain situation and advance payment system on a double-storage fuzzy inventory model," OPSEARCH, Springer;Operational Research Society of India, vol. 59(1), pages 20-40, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:241:y:2021:i:c:s0925527321002310. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.