Yugoslav Journal of Operations Research 2013 Volume 23, Issue 1, Pages: 87-109
https://doi.org/10.2298/YJOR110506019L
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An integrated supply chain inventory model with imperfect-quality items, controllable lead time and distribution-free demand
Lin Hsien-Jen (Department of Applied Mathematics, Aletheia University, Tamsui, New Taipei City, Taiwan)
In this paper, we consider an integrated vendor-buyer inventory policy for a
continuous review model with a random number of defective items and screening
process gradually at a fixed screening rate in buyer’s arriving order lot. We
assume that shortages are allowed and partially backlogged on the buyer’s
side, and that the lead time demand distribution is unknown, except its first
two moments. The objective is to apply the minmax distribution free approach
to determine the optimal order quantity, reorder point, lead time and the
number of lots delivered in one production run simultaneously so that the
expected total system cost is minimized. Numerical experiments along with
sensitivity analysis were performed to illustrate the effects of parameters
on the decision and the total system cost.
Keywords: Integrated model, minmax distribution free approach, defective items, controllable lead time