IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v8y2020i4p548-d342883.html
   My bibliography  Save this article

Determining the Optimal Inventory and Number of Shipments for a Two-Resource Supply Chain with Correlated Demands and Remanufacturing Products Allowing Backorder

Author

Listed:
  • Tseng-Fung Ho

    (Department of Industrial Engineering and Management, National Chin-Yi University of Technology, Taichung 41170, Taiwan)

  • Chi-Chung Lin

    (Department of Industrial Engineering and Management, National Chin-Yi University of Technology, Taichung 41170, Taiwan)

  • Chih-Ling Lin

    (Department of International Business, Central Taiwan University of Science and Technology, No.666, Buzih Road, Beitun District, Taichung 40601, Taiwan)

Abstract

This study develops an integrated supplier–remanufacturer and customer (downstream manufacturer) inventory model that takes into account three-echelon system with correlated demands and remanufacturing products allowing a backorder goods condition. This paper improves the observable fact that the first model system customer might select two sources from remanufactured products or supplier products without defective items. The second model further considers the defective items during the screening duration. The results are examined analytically and numerically to show that the policy of single shipment in large lot sizes results in less total cost than a frequent shipments policy. We also explore the impact of recovery rate on the economic benefits of the inventory system. In addition, we also perform sensitivity analysis to study the impact of seven important parameters (transportation cost, recovery rate, screening rate, annual demand, defect rate, and backorder rate, holding cost,) on the optimal solution. Management insights were also discussed.

Suggested Citation

  • Tseng-Fung Ho & Chi-Chung Lin & Chih-Ling Lin, 2020. "Determining the Optimal Inventory and Number of Shipments for a Two-Resource Supply Chain with Correlated Demands and Remanufacturing Products Allowing Backorder," Mathematics, MDPI, vol. 8(4), pages 1-16, April.
    • Handle: RePEc:gam:jmathe:v:8:y:2020:i:4:p:548-:d:342883
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/8/4/548/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/8/4/548/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Simme Douwe P. Flapper & Jo A.E.E. Nunen & Luk N. Wassenhove, 2005. "Future developments in managing closed-loop supply chains," Springer Books, in: Simme Douwe P. Flapper & Jo A.E.E. Nunen & Luk N. Wassenhove (ed.), Managing Closed-Loop Supply Chains, chapter 18, pages 197-206, Springer.
    2. Kim, Seung-Lae & Ha, Daesung, 2003. "A JIT lot-splitting model for supply chain management: Enhancing buyer-supplier linkage," International Journal of Production Economics, Elsevier, vol. 86(1), pages 1-10, October.
    3. Yingjun Li & Zhixiang Chen, 2015. "Optimal integrated production-inventory system for imperfect quality items considering unequal shipment policy," International Journal of Industrial and Systems Engineering, Inderscience Enterprises Ltd, vol. 19(2), pages 206-238.
    4. Jaber, Mohamad Y. & El Saadany, Ahmed M.A., 2009. "The production, remanufacture and waste disposal model with lost sales," International Journal of Production Economics, Elsevier, vol. 120(1), pages 115-124, July.
    5. Chi-Chung Lin & Chun-Wei Lin, 2011. "Defective item inventory model with remanufacturing or replenishing in an integrated supply chain," International Journal of Integrated Supply Management, Inderscience Enterprises Ltd, vol. 6(3/4), pages 254-269.
    6. Rina Tanaka & Aya Ishigaki & Tomomichi Suzuki & Masato Hamada & Wataru Kawai, 2019. "Data Analysis of Shipment for Textiles and Apparel from Logistics Warehouse to Store Considering Disposal Risk," Sustainability, MDPI, vol. 11(1), pages 1-14, January.
    7. Mitra, Subrata, 2009. "Analysis of a two-echelon inventory system with returns," Omega, Elsevier, vol. 37(1), pages 106-115, February.
    8. Jaber, Mohamad Y. & Rosen, Marc A., 2008. "The economic order quantity repair and waste disposal model with entropy cost," European Journal of Operational Research, Elsevier, vol. 188(1), pages 109-120, July.
    9. Salameh, M. K. & Jaber, M. Y., 2000. "Economic production quantity model for items with imperfect quality," International Journal of Production Economics, Elsevier, vol. 64(1-3), pages 59-64, March.
    10. Maddah, Bacel & Jaber, Mohamad Y., 2008. "Economic order quantity for items with imperfect quality: Revisited," International Journal of Production Economics, Elsevier, vol. 112(2), pages 808-815, April.
    11. El Saadany, Ahmed M.A. & Jaber, Mohamad Y., 2011. "A production/remanufacture model with returns' subassemblies managed differently," International Journal of Production Economics, Elsevier, vol. 133(1), pages 119-126, September.
    12. Jaber, Mohamad Y. & El Saadany, Ahmed M.A., 2011. "An economic production and remanufacturing model with learning effects," International Journal of Production Economics, Elsevier, vol. 131(1), pages 115-127, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. K. Jeganathan & S. Selvakumar & S. Saravanan & N. Anbazhagan & S. Amutha & Woong Cho & Gyanendra Prasad Joshi & Joohan Ryoo, 2022. "Performance of Stochastic Inventory System with a Fresh Item, Returned Item, Refurbished Item, and Multi-Class Customers," Mathematics, MDPI, vol. 10(7), pages 1-37, April.

    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. Govindan, Kannan & Soleimani, Hamed & Kannan, Devika, 2015. "Reverse logistics and closed-loop supply chain: A comprehensive review to explore the future," European Journal of Operational Research, Elsevier, vol. 240(3), pages 603-626.
    2. Omar, Mohd & Yeo, Ivan, 2014. "A production–repair inventory model with time-varying demand and multiple setups," International Journal of Production Economics, Elsevier, vol. 155(C), pages 398-405.
    3. Taleizadeh, Ata Allah & Moshtagh, Mohammad Sadegh, 2019. "A consignment stock scheme for closed loop supply chain with imperfect manufacturing processes, lost sales, and quality dependent return: Multi Levels Structure," International Journal of Production Economics, Elsevier, vol. 217(C), pages 298-316.
    4. El Saadany, Ahmed M.A. & Jaber, Mohamad Y. & Bonney, Maurice, 2013. "How many times to remanufacture?," International Journal of Production Economics, Elsevier, vol. 143(2), pages 598-604.
    5. S. Çetinkaya & Y. Zhang & E. Akçalı, 2017. "Vendor-buyer inventory problem revisited: modeling random yield and trade credit," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(10), pages 1265-1278, October.
    6. Leopoldo Eduardo Cárdenas-Barrón & María José Lea Plaza-Makowsky & María Alejandra Sevilla-Roca & José María Núñez-Baumert & Buddhadev Mandal, 2021. "An Inventory Model for Imperfect Quality Products with Rework, Distinct Holding Costs, and Nonlinear Demand Dependent on Price," Mathematics, MDPI, vol. 9(12), pages 1-20, June.
    7. Tahirov, Nail & Hasanov, Parviz & Jaber, Mohamad Y., 2016. "Optimization of closed-loop supply chain of multi-items with returned subassemblies," International Journal of Production Economics, Elsevier, vol. 174(C), pages 1-10.
    8. Nasr, Walid W. & Jaber, Mohamad Y., 2019. "Supplier development in a two-level lot sizing problem with non-conforming items and learning," International Journal of Production Economics, Elsevier, vol. 216(C), pages 349-363.
    9. Mehmood Khan & Matloub Hussain & Leopoldo Eduardo Cárdenas-Barrón, 2017. "Learning and screening errors in an EPQ inventory model for supply chains with stochastic lead time demands," International Journal of Production Research, Taylor & Francis Journals, vol. 55(16), pages 4816-4832, August.
    10. Bimal Kumar Mawandiya & J. K. Jha & Jitesh J. Thakkar, 2020. "Optimal production-inventory policy for closed-loop supply chain with remanufacturing under random demand and return," Operational Research, Springer, vol. 20(3), pages 1623-1664, September.
    11. Hsu, Jia-Tzer & Hsu, Lie-Fern, 2013. "An EOQ model with imperfect quality items, inspection errors, shortage backordering, and sales returns," International Journal of Production Economics, Elsevier, vol. 143(1), pages 162-170.
    12. Sher, Mikhail M. & Kim, Seung-Lae & Banerjee, Avijit & Paz, Michael T., 2018. "A supply chain coordination mechanism for common items subject to failure in the electronics, defense, and medical industries," International Journal of Production Economics, Elsevier, vol. 203(C), pages 164-173.
    13. Tien-Yu Lin & Kuo-Lung Hou, 2015. "An imperfect quality economic order quantity with advanced receiving," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 23(2), pages 535-551, July.
    14. Mahesh Kumar Jayaswal & Mandeep Mittal, 2022. "Impact of Inflation and Credit Financing Policy on the Supply Chain With Learning," International Journal of Information Systems and Supply Chain Management (IJISSCM), IGI Global, vol. 15(1), pages 1-25, January.
    15. Nasr, Walid W. & Maddah, Bacel & Salameh, Moueen K., 2013. "EOQ with a correlated binomial supply," International Journal of Production Economics, Elsevier, vol. 144(1), pages 248-255.
    16. Pal, Brojeswar & Sana, Shib Sankar & Chaudhuri, Kripasindhu, 2014. "Joint pricing and ordering policy for two echelon imperfect production inventory model with two cycles," International Journal of Production Economics, Elsevier, vol. 155(C), pages 229-238.
    17. Harun Öztürk, 2019. "Modeling an inventory problem with random supply, inspection and machine breakdown," OPSEARCH, Springer;Operational Research Society of India, vol. 56(2), pages 497-527, June.
    18. Ivan Darma Wangsa & Hui Ming Wee & Shih-Hsien Tseng, 2019. "A coordinated vendor–buyer system considering loss and damage claims, insurance cost and stochastic 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. 10(3), pages 384-398, June.
    19. József Vörös, 2013. "Economic order and production quantity models without constraint on the percentage of defective items," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 21(4), pages 867-885, December.
    20. Anuraag Gutgutia & J. K. Jha, 2018. "A closed-form solution for the distribution free continuous review integrated inventory model," Operational Research, Springer, vol. 18(1), pages 159-186, April.

    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:gam:jmathe:v:8:y:2020:i:4:p:548-:d:342883. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.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.