IDEAS home Printed from https://ideas.repec.org/a/spr/annopr/v324y2023i1d10.1007_s10479-022-04666-8.html
   My bibliography  Save this article

Sustainable inventory management with hybrid production system and investment to reduce defects

Author

Listed:
  • Wakhid Ahmad Jauhari

    (Institut Teknologi Sepuluh Nopember
    Universitas Sebelas Maret)

  • I Nyoman Pujawan

    (Institut Teknologi Sepuluh Nopember)

  • Mokh Suef

    (Institut Teknologi Sepuluh Nopember)

Abstract

This paper presents an integrated inventory model for a supply chain system that consists of a vendor and a buyer under stochastic demand and imperfect production. The vendor operates a hybrid system combining a regular production and a green production. Green production is cleaner than the regular production, but it is more costly. The production rate is adjustable and influences the production cost and emissions resulted from production and reworking processes. The production system is imperfect and thus produces a certain percentage of defective items, but the vendor is willing to invest money to reduce the defect rate. The objective of the model is to find the optimal shipment quantity, production allocation, number of shipments, safety factor, defective rate and production rate so that the supply chain cost is minimized. An iterative procedure is proposed to obtain the solution and a numerical example is provided to show the application of the model. The results show that by making an investment, controlling the production rate and setting the production allocation, the system can reduce the defective items. In addition, the last two actions can control the emissions and manage the trade-off. Finally, the sensitivity analysis is also performed to investigate the effect of the changes in key parameters’ values on the behaviour of the model.

Suggested Citation

  • Wakhid Ahmad Jauhari & I Nyoman Pujawan & Mokh Suef, 2023. "Sustainable inventory management with hybrid production system and investment to reduce defects," Annals of Operations Research, Springer, vol. 324(1), pages 543-572, May.
    • Handle: RePEc:spr:annopr:v:324:y:2023:i:1:d:10.1007_s10479-022-04666-8
    DOI: 10.1007/s10479-022-04666-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10479-022-04666-8
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10479-022-04666-8?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. M. Ganesh Kumar & R. Uthayakumar, 2017. "An integrated single vendor–buyer inventory model for imperfect production process with stochastic demand in controllable lead time," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 8(2), pages 1041-1054, November.
    2. Hua, Guowei & Cheng, T.C.E. & Wang, Shouyang, 2011. "Managing carbon footprints in inventory management," International Journal of Production Economics, Elsevier, vol. 132(2), pages 178-185, August.
    3. Xiting Gong & Sean X. Zhou, 2013. "Optimal Production Planning with Emissions Trading," Operations Research, INFORMS, vol. 61(4), pages 908-924, August.
    4. Glock, C. H., 2010. "Batch sizing with controllable production rates," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 57823, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    5. Biswajit Sarkar & Kripasindhu Chaudhuri & Shib Sankar Sana, 2010. "A stock-dependent inventory model in an imperfect production process," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 3(4), pages 361-378.
    6. Wakhid Ahmad Jauhari & I. Nyoman Pujawan, 2014. "Joint economic lot size (JELS) model for single-vendor single-buyer with variable production rate and partial backorder," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 20(1), pages 91-108.
    7. Bonney, Maurice & Jaber, Mohamad Y., 2011. "Environmentally responsible inventory models: Non-classical models for a non-classical era," International Journal of Production Economics, Elsevier, vol. 133(1), pages 43-53, September.
    8. Rad, M. A. & Khoshalhan, F. & Glock, C. H., 2018. "Optimal production and distribution policies for a two-stage supply chain with imperfect items and price- and advertisement-sensitive demand: A note," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 84500, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    9. Hong, Zhaofu & Chu, Chengbin & Yu, Yugang, 2016. "Dual-mode production planning for manufacturing with emission constraints," European Journal of Operational Research, Elsevier, vol. 251(1), pages 96-106.
    10. Marchi, B. & Zanoni, S. & Zavanella, L.E. & Jaber, M.Y., 2019. "Supply chain models with greenhouse gases emissions, energy usage, imperfect process under different coordination decisions," International Journal of Production Economics, Elsevier, vol. 211(C), pages 145-153.
    11. Wakhid Ahmad Jauhari & Nelita Putri Sejati & Cucuk Nur Rosyidi, 2016. "A collaborative supply chain inventory model with defective items, adjusted production rate and variable lead time," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 9(6), pages 733-750.
    12. Wahab, M.I.M. & Mamun, S.M.H. & Ongkunaruk, P., 2011. "EOQ models for a coordinated two-level international supply chain considering imperfect items and environmental impact," International Journal of Production Economics, Elsevier, vol. 134(1), pages 151-158, November.
    13. Sana, Shib Sankar, 2010. "A production-inventory model in an imperfect production process," European Journal of Operational Research, Elsevier, vol. 200(2), pages 451-464, January.
    14. Eiamkanchanalai, Somkiat & Banerjee, Avijit, 1999. "Production lot sizing with variable production rate and explicit idle capacity cost," International Journal of Production Economics, Elsevier, vol. 59(1-3), pages 251-259, March.
    15. Glock, C. H. & Jaber, M. Y. & El Saadany, A., 2013. "Supply Chain Coordination with Emission Reduction Incentives," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 57672, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    16. AlDurgam, Mohammad & Adegbola, Kehinde & Glock, Christoph H., 2017. "A single-vendor single-manufacturer integrated inventory model with stochastic demand and variable production rate," International Journal of Production Economics, Elsevier, vol. 191(C), pages 335-350.
    17. Yosef Daryanto & Hui Ming Wee & Gede Agus Widyadana, 2019. "Low Carbon Supply Chain Coordination for Imperfect Quality Deteriorating Items," Mathematics, MDPI, vol. 7(3), pages 1-24, March.
    18. AlDurgham, M. & Adegbola, K. & Glock, C. H., 2017. "A single-vendor single-manufacturer integrated inventory model with stochastic demand and variable production rate," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 87594, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    19. Goyal, Suresh K. & Nebebe, Fassil, 2000. "Determination of economic production-shipment policy for a single-vendor-single-buyer system," European Journal of Operational Research, Elsevier, vol. 121(1), pages 175-178, February.
    20. Dey, O. & Giri, B.C., 2014. "Optimal vendor investment for reducing defect rate in a vendor–buyer integrated system with imperfect production process," International Journal of Production Economics, Elsevier, vol. 155(C), pages 222-228.
    21. Freimer, Michael & Thomas, Douglas & Tyworth, John, 2006. "The value of setup cost reduction and process improvement for the economic production quantity model with defects," European Journal of Operational Research, Elsevier, vol. 173(1), pages 241-251, August.
    22. Evan L. Porteus, 1986. "Optimal Lot Sizing, Process Quality Improvement and Setup Cost Reduction," Operations Research, INFORMS, vol. 34(1), pages 137-144, February.
    23. Rendy Surya Saga & Wakhid Ahmad Jauhari & Pringgo Widyo Laksono & Anindya Rachma Dwicahyani, 2019. "Investigating carbon emissions in a production-inventory model under imperfect production, inspection errors and service-level constraint," International Journal of Logistics Systems and Management, Inderscience Enterprises Ltd, vol. 34(1), pages 29-55.
    24. Ashkan Memari & Abd Rahman Abdul Rahim & Robiah Ahmad & Adnan Hassan, 2016. "A literature review on green supply chain modelling for optimising CO 2 emission," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 26(4), pages 509-525.
    25. Wee, H.M. & Yu, Jonas & Chen, M.C., 2007. "Optimal inventory model for items with imperfect quality and shortage backordering," Omega, Elsevier, vol. 35(1), pages 7-11, February.
    26. Glock, C. H., 2011. "Batch sizing with controllable production rates in a multi-stage production system," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 57822, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    Full references (including those not matched with items on IDEAS)

    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. Glock, Christoph H. & Grosse, Eric H., 2021. "The impact of controllable production rates on the performance of inventory systems: A systematic review of the literature," European Journal of Operational Research, Elsevier, vol. 288(3), pages 703-720.
    2. Asif Iqbal Malik & Biswajit Sarkar, 2020. "Coordination Supply Chain Management Under Flexible Manufacturing, Stochastic Leadtime Demand, and Mixture of Inventory," Mathematics, MDPI, vol. 8(6), pages 1-32, June.
    3. Asif Iqbal Malik & Byung Soo Kim, 2020. "A Constrained Production System Involving Production Flexibility and Carbon Emissions," Mathematics, MDPI, vol. 8(2), pages 1-21, February.
    4. Dhahri, Akrem & Gharbi, Ali & Ouhimmou, Mustapha, 2022. "Integrated production-delivery control policy for an unreliable manufacturing system and multiple retailers," International Journal of Production Economics, Elsevier, vol. 245(C).
    5. Konur, Dinçer & Campbell, James F. & Monfared, Sepideh A., 2017. "Economic and environmental considerations in a stochastic inventory control model with order splitting under different delivery schedules among suppliers," Omega, Elsevier, vol. 71(C), pages 46-65.
    6. Mohammed Alkahtani & Muhammad Omair & Qazi Salman Khalid & Ghulam Hussain & Imran Ahmad & Catalin Pruncu, 2021. "A COVID-19 Supply Chain Management Strategy Based on Variable Production under Uncertain Environment Conditions," IJERPH, MDPI, vol. 18(4), pages 1-23, February.
    7. Battini, Daria & Persona, Alessandro & Sgarbossa, Fabio, 2014. "A sustainable EOQ model: Theoretical formulation and applications," International Journal of Production Economics, Elsevier, vol. 149(C), pages 145-153.
    8. Castellano, Davide & Gallo, Mosè & Grassi, Andrea & Santillo, Liberatina C., 2019. "The effect of GHG emissions on production, inventory replenishment and routing decisions in a single vendor-multiple buyers supply chain," International Journal of Production Economics, Elsevier, vol. 218(C), pages 30-42.
    9. Herbon, Avi, 2020. "An approximated solution to the constrained integrated manufacturer-buyer supply problem," Operations Research Perspectives, Elsevier, vol. 7(C).
    10. Harpreet Kaur & Surya Prakash Singh, 2019. "Sustainable procurement and logistics for disaster resilient supply chain," Annals of Operations Research, Springer, vol. 283(1), pages 309-354, December.
    11. Andriolo, Alessandro & Battini, Daria & Persona, Alessandro & Sgarbossa, Fabio, 2015. "Haulage sharing approach to achieve sustainability in material purchasing: New method and numerical applications," International Journal of Production Economics, Elsevier, vol. 164(C), pages 308-318.
    12. Mittal, Mandeep & Sarkar, Biswajit, 2023. "Stochastic behavior of exchange rate on an international supply chain under random energy price," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 205(C), pages 232-250.
    13. Palak, Gökçe & Ekşioğlu, Sandra Duni & Geunes, Joseph, 2014. "Analyzing the impacts of carbon regulatory mechanisms on supplier and mode selection decisions: An application to a biofuel supply chain," International Journal of Production Economics, Elsevier, vol. 154(C), pages 198-216.
    14. Tang, Shaolong & Wang, Wenjie & Cho, Stella & Yan, Hong, 2018. "Reducing emissions in transportation and inventory management: (R, Q) Policy with considerations of carbon reduction," European Journal of Operational Research, Elsevier, vol. 269(1), pages 327-340.
    15. Mateen, Arqum & Chatterjee, Ashis K, 2015. "Vendor Managed Inventory System with Emission Related Costs," Working papers 185, Indian Institute of Management Kozhikode.
    16. Mateen, Arqum & Chatterjee, Ashis K, 2015. "Analysis of Replenishment Policy Options in VMI Systems with Emission Related Cost," Working papers 186, Indian Institute of Management Kozhikode.
    17. Schaefer, Brian & Konur, Dinçer, 2015. "Economic and environmental considerations in a continuous review inventory control system with integrated transportation decisions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 80(C), pages 142-165.
    18. Ventura, José A. & Bunn, Kevin A. & Venegas, Bárbara B. & Duan, Lisha, 2021. "A coordination mechanism for supplier selection and order quantity allocation with price-sensitive demand and finite production rates," International Journal of Production Economics, Elsevier, vol. 233(C).
    19. Bimal Kumar Sett & Bikash Koli Dey & Biswajit Sarkar, 2020. "Autonomated Inspection Policy for Smart Factory—An Improved Approach," Mathematics, MDPI, vol. 8(10), pages 1-19, October.
    20. Daryanto, Yosef & Wee, Hui Ming & Astanti, Ririn Diar, 2019. "Three-echelon supply chain model considering carbon emission and item deterioration," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 368-383.

    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:spr:annopr:v:324:y:2023:i:1:d:10.1007_s10479-022-04666-8. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.