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Determining production–shipment policy for a vendor–buyer integrated system with rework and an amending multi-delivery schedule

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  • Chiu, Singa Wang
  • Lin, Li-Wen
  • Chen, Kuang-Ku
  • Chou, Chung-Li

Abstract

This paper examines a vendor–buyer integrated system that includes rework and an enhanced product delivery policy that aims at lowering stock holding costs for both the vendor and the buyer. It extends the recent work of Chiu et al. (2011) by incorporating an amending ‘n+1’ shipment policy into their model. The objective is to determine both the optimal replenishment lot size and optimal number of shipments that would minimize the long-run average cost for the proposed system. This study uses mathematical modeling along with Hessian matrix equations to obtain closed-form solutions of optimal replenishment lot size and number of deliveries. In addition, this study demonstrates, through a numerical example, the practical implications of the results in various scenarios.

Suggested Citation

  • Chiu, Singa Wang & Lin, Li-Wen & Chen, Kuang-Ku & Chou, Chung-Li, 2013. "Determining production–shipment policy for a vendor–buyer integrated system with rework and an amending multi-delivery schedule," Economic Modelling, Elsevier, vol. 33(C), pages 668-675.
    • Handle: RePEc:eee:ecmode:v:33:y:2013:i:c:p:668-675
    DOI: 10.1016/j.econmod.2013.05.020
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    References listed on IDEAS

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    1. Leroy B. Schwarz, 1973. "A Simple Continuous Review Deterministic One-Warehouse N-Retailer Inventory Problem," Management Science, INFORMS, vol. 19(5), pages 555-566, January.
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    8. Alghalith, Moawia, 2013. "The interaction among production, hedging and investment decisions," Economic Modelling, Elsevier, vol. 30(C), pages 193-195.
    9. Hahm, Juho & Yano, Candace Arai, 1992. "The economic lot and delivery scheduling problem: The single item case," International Journal of Production Economics, Elsevier, vol. 28(2), pages 235-252, November.
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    Citations

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    Cited by:

    1. Hesham K. Alfares & Ahmed M. Attia, 2017. "A supply chain model with vendor-managed inventory, consignment, and quality inspection errors," International Journal of Production Research, Taylor & Francis Journals, vol. 55(19), pages 5706-5727, October.
    2. Chiu, Yuan-Shyi Peter & Chang, Huei-Hsin, 2014. "Optimal run time for EPQ model with scrap, rework and stochastic breakdowns: A note," Economic Modelling, Elsevier, vol. 37(C), pages 143-148.
    3. Tseng, Chao-Tang & Wu, Mei-Fang & Lin, Hong-Dar & Chiu, Yuan-Shyi Peter, 2014. "Solving a vendor–buyer integrated problem with rework and a specific multi-delivery policy by a two-phase algebraic approach," Economic Modelling, Elsevier, vol. 36(C), pages 30-36.
    4. Chiu, Singa Wang & Pai, Fan-Yun & Wu, Wen Kuei, 2013. "Alternative approach to determine the common cycle time for a multi-item production system with discontinuous deliveries and failure in rework," Economic Modelling, Elsevier, vol. 35(C), pages 593-596.
    5. Mubashir Hayat & Bashir Salah & Misbah Ullah & Iftikhar Hussain & Razaullah Khan, 2020. "Shipment Policy for an Economic Production Quantity Model Considering Imperfection and Transportation Cost," Sustainability, MDPI, vol. 12(21), pages 1-16, October.

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    More about this item

    Keywords

    Vendor–buyer integrated system; Production–shipment policy; Lot size; Deliveries; Scrap; Rework;
    All these keywords.

    JEL classification:

    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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