Integrated supply chain inventory model with quality improvement involving controllable lead time and backorder price discount

摘要

For the past four decades the integrated vendor and buyer supply chain inventory model has beenan interesting topic, but quality improvement of defective items in the integrated inventory modelwith backorder price discount involving controllable lead time has been rarely discussed. Theaim of this paper is to minimize the total related cost in the continuous review model byconsidering the order quantity, reorder point, lead time, process quality, backorder price discountand number of shipment as decision variables. Moreover, we assume that an investment functionis used to improve the process quality. The lead time demand follows a normal distribution. Inaddition, the buyer offers backorder price discount to motivate the customers for possiblebackorders. There are some defective items in the arrival lot, so its treatment is also taken inaccount in this paper. We develop an iterative procedure for finding the optimal values ofdecision variables and numerical example is presented to illustrate the solution procedure.Additionally, sensitivity analysis with respect to major parameters is also carried out.