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Consignment stock policy with unequal shipments and process unreliability for a two-level supply chain

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  • B.C. Giri
  • A. Chakraborty
  • T. Maiti

Abstract

This paper considers a vendor managed inventory model with consignment stock policy in which a single vendor delivers a single product to a single buyer in unequal-sized shipments. The vendor’s production process may produce some defective items during a production run. The buyer performs a screening process immediately after receiving each delivery from the vendor and the vendor bears the warranty cost of defective item, if any. The buyer either scraps or repairs the defective items by sending them to a repair factory. The average expected profit of the integrated system is derived using renewal reward theorem and a solution procedure is suggested to determine the optimal shipment policy of the vendor. Numerical examples are taken to determine both the equal and unequal shipment policies and compare their relative performances.

Suggested Citation

  • B.C. Giri & A. Chakraborty & T. Maiti, 2017. "Consignment stock policy with unequal shipments and process unreliability for a two-level supply chain," International Journal of Production Research, Taylor & Francis Journals, vol. 55(9), pages 2489-2505, May.
    • Handle: RePEc:taf:tprsxx:v:55:y:2017:i:9:p:2489-2505
    DOI: 10.1080/00207543.2016.1233362
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    Cited by:

    1. Adel A. Alamri, 2023. "Carbon Emissions Effect on Vendor-Managed Inventory System Considering Displaced Re-Start-Up Production Time," Logistics, MDPI, vol. 7(4), pages 1-29, September.
    2. K. F. Mary Latha & M. Ganesh Kumar & R. Uthayakumar, 2021. "Two echelon economic lot sizing problems with geometric shipment policy backorder price discount and optimal investment to reduce ordering cost," OPSEARCH, Springer;Operational Research Society of India, vol. 58(4), pages 1133-1163, December.
    3. Mubashir Hayat & Bashir Salah & Misbah Ullah & Iftikhar Hussain & Razaullah Khan, 2020. "Shipment Policy for an Economic Production Quantity Model Considering Imperfection and Transportation Cost," Sustainability, MDPI, vol. 12(21), pages 1-16, October.
    4. Tiwari, Sunil & Kazemi, Nima & Modak, Nikunja Mohan & Cárdenas-Barrón, Leopoldo Eduardo & Sarkar, Sumon, 2020. "The effect of human errors on an integrated stochastic supply chain model with setup cost reduction and backorder price discount," International Journal of Production Economics, Elsevier, vol. 226(C).
    5. Waseem Sajjad & Misbah Ullah & Razaullah Khan & Mubashir Hayat, 2022. "Developing a Comprehensive Shipment Policy through Modified EPQ Model Considering Process Imperfections, Transportation Cost, and Backorders," Logistics, MDPI, vol. 6(3), pages 1-20, June.

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