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Effects of human errors and trade-credit financing in two-echelon supply chain models

Author

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  • Dongmin Shin
  • Mandeep Mittal
  • Biswajit Sarkar

Abstract

This paper develops two centralised two-echelon supply chain models with the trade-credit financing and inspection errors. Both models follow a single-setup-multi-delivery (SSMD) policy and each delivery is designed using the just-in-time (JIT) method to increase the efficiency of the supply chain. In first model, the random defective rate is assumed and each delivered item goes through inspection process at the buyer's end due to the contract with vendor, because vendor gives a trade-credit support to buyer. In second model, human errors of Type I and Type II are considered due to tiredness and ignorance of the inspector during inspection process. The joint annual cost of supply chain is minimised with respect to order quantity and number of shipments. Finally, some numerical examples, sensitivity analysis, and graphical representations are given to illustrate more savings from existing literature. [Received 13 December 2015; Revised 19 June 2016; Accepted 28 June 2016]

Suggested Citation

  • Dongmin Shin & Mandeep Mittal & Biswajit Sarkar, 2018. "Effects of human errors and trade-credit financing in two-echelon supply chain models," European Journal of Industrial Engineering, Inderscience Enterprises Ltd, vol. 12(4), pages 465-503.
    • Handle: RePEc:ids:eujine:v:12:y:2018:i:4:p:465-503
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    Citations

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    Cited by:

    1. Faranak Emtehani & Nasim Nahavandi & Farimah Mokhatab Rafiei, 2021. "A joint inventory–finance model for coordinating a capital-constrained supply chain with financing limitations," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-39, December.
    2. Mahesh Kumar Jayaswal & Mandeep Mittal & Isha Sangal, 2021. "Ordering policies for deteriorating imperfect quality items with trade-credit financing under learning effect," 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. 12(1), pages 112-125, February.
    3. Chang Wook Kang & Misbah Ullah & Mitali Sarkar & Muhammad Omair & Biswajit Sarkar, 2019. "A Single-Stage Manufacturing Model with Imperfect Items, Inspections, Rework, and Planned Backorders," Mathematics, MDPI, vol. 7(5), pages 1-18, May.

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