Journal of Applied Mathematics

Effects of Lot-Sizing Integration and Learning Effect on Managing Imperfect Items in a Manufacturer-Retailer Chain

Yu-Chung Tsao, Tsung-Hui Chen, and Pei-Ying Wu

Full-text: Open access

Abstract

An optimal supply chain performance requires the execution of a precise set of actions, including coordination of the movement of materials, products, and information flows among suppliers, manufacturers, distributors, retailers, and customers. However, a supply chain usually involves several members who are primarily concerned with optimizing their own objectives. This self-serving focus often results in poor channel performance. The present study used the Nash game and the cooperation game in an imperfect production system to investigate the combined effects of lot-sizing integration, learning effect, and an imperfect production process on a manufacturer-retailer channel. This paper also developed a search procedure to solve the problem described, and the optimal properties and a numerical study were conducted to seek structural and quantitative insights into the relationship between the upstream and downstream entities of the supply chain. Numerical results indicated that the cooperation game policy created a higher cost reduction under a wide range of parameter settings.

Article information

Source
J. Appl. Math., Volume 2013 (2013), Article ID 413206, 11 pages.

Dates
First available in Project Euclid: 14 March 2014

Permanent link to this document
https://projecteuclid.org/euclid.jam/1394808270

Digital Object Identifier
doi:10.1155/2013/413206

Zentralblatt MATH identifier
06950657

Citation

Tsao, Yu-Chung; Chen, Tsung-Hui; Wu, Pei-Ying. Effects of Lot-Sizing Integration and Learning Effect on Managing Imperfect Items in a Manufacturer-Retailer Chain. J. Appl. Math. 2013 (2013), Article ID 413206, 11 pages. doi:10.1155/2013/413206. https://projecteuclid.org/euclid.jam/1394808270


Export citation

References

  • M. G. Fiestras-Janeiro, I. García-Jurado, A. Meca, and M. A. Mosquera, “Cooperative game theory and inventory management,” European Journal of Operational Research, vol. 210, no. 3, pp. 459–466, 2011.
  • G. P. Cachon, “Supply chain coordination with contracts,” in Handbooks in Operations Research and Management Science: Supply Chain Management, S. Graves and T. de Kok, Eds., North Holland, 2003.
  • J. P. Monahan, “A quantity discount pricing model to increase supplier's profits,” Management Science, vol. 32, pp. 1177–1185, 1984.
  • R. Lal and R. Staelin, “An approach for developing an optimal discount pricing policy,” Management Science, vol. 30, pp. 1524–1539, 1984.
  • J.-M. Chen and T.-H. Chen, “Effects of joint replenishment and channel coordination for managing multiple deteriorating products in a supply chain,” Journal of the Operational Research Society, vol. 56, no. 10, pp. 1224–1234, 2005.
  • S. Zanoni and L. Zavanella, “Single-vendor single-buyer with integrated transport-inventory system: models and heuristics in the case of perishable goods,” Computers and Industrial Engineering, vol. 52, no. 1, pp. 107–123, 2007.
  • Y.-C. Tsao, “Retailer's optimal ordering and discounting policies under advance sales discount and trade credits,” Computers and Industrial Engineering, vol. 56, no. 1, pp. 208–215, 2009.
  • R. Kohli and H. Park, “Coordinating buyer-seller transactions across multiple products,” Management Science, vol. 40, no. 9, pp. 1145–1150, 1994.
  • K. L. Cheung and H. L. Lee, “The inventory benefit of shipment coordination and stock rebalancing in a supply chain,” Management Science, vol. 48, no. 2, pp. 300–306, 2002.
  • T.-H. Chen and J.-M. Chen, “Optimizing supply chain collaboration based on joint replenishment and channel coordination,” Transportation Research E, vol. 41, no. 4, pp. 261–285, 2005.
  • M. Parlar and Z. K. Weng, “Coordinating pricing and production decisions in the presence of price competition,” European Journal of Operational Research, vol. 170, no. 1, pp. 211–227, 2005.
  • J.-M. Chen and T.-H. Chen, “The profit-maximization model for a multi-item distribution channel,” Transportation Research E, vol. 43, no. 4, pp. 338–354, 2007.
  • G. Cai, Z. G. Zhang, and M. Zhang, “Game theoretical perspectives on dual-channel supply chain competition with price discounts and pricing schemes,” International Journal of Production Economics, vol. 117, no. 1, pp. 80–96, 2009.
  • J. G. Szmerekovsky and J. Zhang, “Pricing and two-tier advertising with one manufacturer and one retailer,” European Journal of Operational Research, vol. 192, no. 3, pp. 904–917, 2009.
  • Y.-C. Tsao, “Managing multi-echelon multi-item channels with trade allowances under credit period,” International Journal of Production Economics, vol. 127, no. 2, pp. 226–237, 2010.
  • T. H. Chen and H. M. Chang, “Optimal ordering and policies for deteriorating items in one-vendor multi-retailer supply chain,” International Journal of Advanced Manufacturing Technology, vol. 41, pp. 1208–1220, 2010.
  • A. Kamali, S. M. T. Fatemi Ghomi, and F. Jolai, “A multi-objective quantity discount and joint optimization model for coordination of a single-buyer multi-vendor supply chain,” Computers & Mathematics with Applications, vol. 62, no. 8, pp. 3251–3269, 2011.
  • G. P. Cachon and S. Netessine, “Game theory in supply chain analysis,” in Handbook of Supply Chain Analysis in E-Business Era, D. Simchi-Levi, S. D. Wu, and M. Shen, Eds., Kluwer Academic, New York, NY, USA, 2004.
  • S. S. Sana, “A production-inventory model in an imperfect production process,” European Journal of Operational Research, vol. 200, no. 2, pp. 451–464, 2010.
  • S. S. Sana, “An economic production lot size model in an imperfect production system,” European Journal of Operational Research, vol. 201, no. 1, pp. 158–170, 2010.
  • M. K. Salameh and M. Y. Jaber, “Economic production quantity model for items with imperfect quality,” International Journal of Production Economics, vol. 64, no. 1, pp. 59–64, 2000.
  • B. Maddah and M. Y. Jaber, “Economic order quantity for items with imperfect quality: revisited,” International Journal of Production Economics, vol. 112, no. 2, pp. 808–815, 2008.
  • M. Ben-Daya and A. Rahim, “Optimal lot-sizing, quality improvement and inspection errors for multistage production systems,” International Journal of Production Research, vol. 41, no. 1, pp. 65–79, 2003.
  • D. Ojha, B. R. Sarker, and P. Biswas, “An optimal batch size for an imperfect production system with quality assurance and rework,” International Journal of Production Research, vol. 45, no. 14, pp. 3191–3214, 2007.
  • M. Y. Jaber, S. K. Goyal, and M. Imran, “Economic production quantity model for items with imperfect quality subject to learning effects,” International Journal of Production Economics, vol. 115, no. 1, pp. 143–150, 2008.
  • S. S. Sana, “A production-inventory model of imperfect quality products in a three-layer supply chain,” Decision Support Systems, vol. 50, no. 2, pp. 539–547, 2011.
  • Y. C. Tsao, T. H. Chen, and S. M. Huang, “A production policy considering reworking of imperfect items and trade credit,” Flexible Services and Manufacturing Journal, vol. 23, no. 1, pp. 48–63, 2011.
  • M. Das Roy, S. S. Sana, and K. Chaudhuri, “An optimal shipment strategy for imperfect items in a stock-out situation,” Mathematical and Computer Modelling, vol. 54, no. 9-10, pp. 2528–2543, 2011.
  • S. S. Sana, “Optimal pricing strategy for livestock of fishery and poultry,” Economic Modelling, vol. 29, no. 4, pp. 1024–1034, 2012.
  • B. Pal, S. S. Sana, and K. Chaudhuri, “A multi-echelon supply chain model for reworkable items in multiple-markets with supply disruption,” Economic Modelling, vol. 29, pp. 1891–1898, 2012.
  • B. Pal, S. S. Sana, and K. Chaudhuri, “Three-layer supply chain–-a production-inventory model for reworkable items,” Applied Mathematics and Computation, vol. 219, no. 2, pp. 530–543, 2012.
  • B. Pal, S. S. Sana, and K. Chaudhuri, “A three layer multi-item production-inventory model for multiple suppliers and retailers,” Economic Modelling, vol. 29, pp. 2704–2710, 2012.
  • S. S. Sana, “A collaborating inventory model in a supply chain,” Economic Modelling, vol. 29, pp. 2016–2023, 2012.
  • B. Sarkar, S. S. Sana, and K. Chaudhuri, “An imperfect production process for time varying demand with inflation and time value of money–-an EMQ model,” Expert Systems with Applications, vol. 38, no. 11, pp. 13543–13548, 2011.
  • A. Roy, S. S. Sana, and K. Chaudhuri, “Optimal replenishment order for uncertain demand in three layer supply chain,” Economic Modelling, vol. 29, pp. 2274–2282, 2012.
  • B. Pal, S. S. Sana, and K. Chaudhuri, “A mathematical model on EPQ for stochastic demand in an imperfect production system,” Journal of Manufacturing Systems, vol. 32, pp. 260–270, 2013.
  • S. S. Sana, “Optimal contract strategies for two stage supply chain,” Economic Modelling, vol. 30, pp. 253–260, 2013.
  • T. Wright, “Factors affecting the cost of airplanes,” Journal of Aeronautical Science, vol. 3, pp. 122–128, 1936.