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

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  • 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
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    Cited by:

    1. 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).
    2. Wang, Huan & Wang, Daao & Fang, Zhigeng & Zeng, Xiao-Jun, 2024. "Impacts of inspection errors and warranty costs on a complex product supply chain under different development modes," International Journal of Production Economics, Elsevier, vol. 272(C).
    3. Zhang, Yanzi & Berenguer, Gemma & Zhang, Zhi-Hai, 2024. "A subsidized reverse supply chain in the Chinese electronics industry," Omega, Elsevier, vol. 122(C).
    4. 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).

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