scholarly journals Inventory control in a two-level supply chain with learning, quality and inspection errors

2021 ◽  
Author(s):  
Mehmood Khan
Keyword(s):  
Supply Chain ◽  
Product Quality ◽  
Inventory Management ◽  
Human Error ◽  
Threshold Value ◽  
Process Quality ◽  
Lot Size ◽  
Defective Items ◽  
Inspection Errors ◽  
Screening Cost

A common measure of quality for a buyer or a vendor is the defect rate. Defects may represent an attribute, a dimension or a quantity. They may be classified as product quality defects or process quality defects. Product quality defects may be caused by human error which can de due to fatigue, lack of proper training, or other reasons. For example, an inspector may misclassify a defective fuel tank of a car as good. On the other hand, process quality defects maybe caused by a machine going out-of-control. While many researchers assume that the screening processes which separate the defective items are error-free, it would be realistic to consider misclassification errors in this process. Beside inspection errors, learning is another human factor that brings in enhancement in the overall performance of a supply chain. Learning is inherent when there are workers involved in a repetitive type of production process. Learning and forgetting are even more important in manufacturing environments that emphasize on flexibility where workers are cross-trained to do different tasks and where products have a short life cycle. Inventory management with learning in quality, inspection and processing time will be the focus of this thesis. A number of models will be developed for a buyer and/or a two level supply chain to incorporate these human factors. The key findings of this work may be summarized as 1. Inspection errors significantly affect the annual profit. 2. An increase in the unit screening cost reduces the annual profit to a great extent at slower rates of learning. 3. For the two-level supply chain we investigated, learning in production drops the annual cost significantly while the learning in supplier's quality results in a situation where there are no defectives from the suppliers. 4. Type II error may seem to be beneficial for a two level supply chain as the order/lot size goes down and thus affects the costs of ordering, production and screening. 5. Consignment stocking policy performs better than conventional stocking when holding costs go higher than a threshold value.

scholarly journals Inventory control in a two-level supply chain with learning, quality and inspection errors

2021 ◽  
Author(s):  
Mehmood Khan
Keyword(s):  
Supply Chain ◽  
Product Quality ◽  
Inventory Management ◽  
Human Error ◽  
Threshold Value ◽  
Process Quality ◽  
Lot Size ◽  
Defective Items ◽  
Inspection Errors ◽  
Screening Cost

A common measure of quality for a buyer or a vendor is the defect rate. Defects may represent an attribute, a dimension or a quantity. They may be classified as product quality defects or process quality defects. Product quality defects may be caused by human error which can de due to fatigue, lack of proper training, or other reasons. For example, an inspector may misclassify a defective fuel tank of a car as good. On the other hand, process quality defects maybe caused by a machine going out-of-control. While many researchers assume that the screening processes which separate the defective items are error-free, it would be realistic to consider misclassification errors in this process. Beside inspection errors, learning is another human factor that brings in enhancement in the overall performance of a supply chain. Learning is inherent when there are workers involved in a repetitive type of production process. Learning and forgetting are even more important in manufacturing environments that emphasize on flexibility where workers are cross-trained to do different tasks and where products have a short life cycle. Inventory management with learning in quality, inspection and processing time will be the focus of this thesis. A number of models will be developed for a buyer and/or a two level supply chain to incorporate these human factors. The key findings of this work may be summarized as 1. Inspection errors significantly affect the annual profit. 2. An increase in the unit screening cost reduces the annual profit to a great extent at slower rates of learning. 3. For the two-level supply chain we investigated, learning in production drops the annual cost significantly while the learning in supplier's quality results in a situation where there are no defectives from the suppliers. 4. Type II error may seem to be beneficial for a two level supply chain as the order/lot size goes down and thus affects the costs of ordering, production and screening. 5. Consignment stocking policy performs better than conventional stocking when holding costs go higher than a threshold value.

scholarly journals Optimal inventory policy for the two-level supply chain with defective items

2021 ◽  
Author(s):  
S. M. Hafiz Al Mamun
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Project Work ◽  
High Tech ◽  
Optimum Number ◽  
Screening Process ◽  
Defective Items ◽  
Expected Cost ◽  
Holding Costs ◽  
Shipping Costs

This project focuses on two-level closed-loop supply chains with defective items. The objective of this project is to develop and design a model that minimizes the total expected cost per unit time, which includes set-up costs, holding costs, transportation/shipping costs, and screening costs of the integrated two-level close-loop supply chain. The model also finds the optimum order size and optimum number of shipments. The buyer screens the products received from the vendor to find the defective items. The holding costs of the defective items at the buyer's end is paid by the vendor. After the screening process, the defective items are shipped back to the vendor and the vendor has to carry the shipping costs of the defective items. Two scenarios may arise: where both the vendor and buyer are domestic or international, where vendor and buyer are located in two different countries. In the case of an international supply chain, exchange rate between two countries has also been considered. In current world since the business growing fast, the inventory management of any business enterprise improving their performance financially by minimizing the holding cost. The analysis shows how the percentage of defective item affects the total expected cost. The project work has an important involvement for improvement in the vendor-buyer correlated high-tech supply chain industries.

scholarly journals An EPQ inventory model considering an imperfect production system with probabilistic demand and collaborative approach

2019 ◽  
Vol 17 (2) ◽  
pp. 282-304
Author(s):  
Katherinne Salas-Navarro ◽  
Jaime Acevedo-Chedid ◽  
Gina Mora Árquez ◽  
Whady F. Florez ◽  
Holman Ospina-Mateus ◽  
...  
Keyword(s):  
Supply Chain ◽  
Production System ◽  
Inventory Model ◽  
Collaborative Approach ◽  
Lot Size ◽  
Defective Items ◽  
Content Type ◽  
Imperfect Production ◽  
Imperfect Items ◽  
Exponential Probability

Purpose The purpose of this paper is to propose an economic production quantity (EPQ) inventory model considering imperfect items and probabilistic demand for a two-echelon supply chain. The production process is imperfect and the imperfect quality items are removed from the lot size. The demand rate of the inventory system is random and follows an exponential probability density function and the demand of the retailers is depending on the initiatives of the sales team. Design/methodology/approach Two approaches are examined. In the non-collaborative approach, any member of the supply chain can be the leader and takes decisions to optimize the profits, and in the collaborative system, all members make joint decisions about the production, supply, sales and inventory to optimize the profits of the supply chain members. The calculus approach is applied to find the maximum profit related to the members of the supply chain. Findings A numerical example is presented to illustrate the performance of the EPQ model. The results show that collaborative approach generates greater profits to the supply chain and the market’s demand represents the variable behavior and uncertainty that is generated in the replenishment of a supply chain. Originality/value The new and major contributions of this research are: the inventory model considers demand for products is random variable which follows an exponential probability distribution function and it also depends on the initiatives of sales teams, the imperfect production system generates defective items, different cycle time are considered in manufacturer and retailers and collaborative and non-collaborative approaches are also studied.

scholarly journals Effect of Unequal Lot Sizes, Variable Setup Cost, and Carbon Emission Cost in a Supply Chain Model

2015 ◽  
Vol 2015 ◽  
pp. 1-13 ◽  
Author(s):  
Biswajit Sarkar ◽  
Sharmila Saren ◽  
Debjani Sinha ◽  
Sun Hur
Keyword(s):  
Supply Chain ◽  
Carbon Emission ◽  
Graphical Representation ◽  
Chain Model ◽  
Lot Size ◽  
Setup Cost ◽  
Defective Items ◽  
Supply Chain Model ◽  
Investment Function ◽  
Optimum Solution

Due to heavy transportation for single-setup multidelivery (SSMD) policy in supply chain management, this model assumes carbon emission cost to obtain a realistic behavior for world environment. The transportation for buyer and vendor is considered along with setup cost reduction by using an investment function. It is assumed that the shipment lot size of each delivery is unequal and variable. The buyer inspects all received products and returns defective items to vendor for reworking process. Because of this policy, end customers will only obtain nondefective items. The analytical optimization is considered to obtain the optimum solution of the model. The main goal of this paper is to reduce the total cost by considering carbon emission during the transportation. A numerical example, graphical representation, and sensitivity analysis are given to illustrate the model.

scholarly journals Optimal inventory policy for the two-level supply chain with defective items

2021 ◽  
Author(s):  
S. M. Hafiz Al Mamun
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Project Work ◽  
High Tech ◽  
Optimum Number ◽  
Screening Process ◽  
Defective Items ◽  
Expected Cost ◽  
Holding Costs ◽  
Shipping Costs

This project focuses on two-level closed-loop supply chains with defective items. The objective of this project is to develop and design a model that minimizes the total expected cost per unit time, which includes set-up costs, holding costs, transportation/shipping costs, and screening costs of the integrated two-level close-loop supply chain. The model also finds the optimum order size and optimum number of shipments. The buyer screens the products received from the vendor to find the defective items. The holding costs of the defective items at the buyer's end is paid by the vendor. After the screening process, the defective items are shipped back to the vendor and the vendor has to carry the shipping costs of the defective items. Two scenarios may arise: where both the vendor and buyer are domestic or international, where vendor and buyer are located in two different countries. In the case of an international supply chain, exchange rate between two countries has also been considered. In current world since the business growing fast, the inventory management of any business enterprise improving their performance financially by minimizing the holding cost. The analysis shows how the percentage of defective item affects the total expected cost. The project work has an important involvement for improvement in the vendor-buyer correlated high-tech supply chain industries.

FlexRFID Middleware in the Supply Chain

2012 ◽  
pp. 163-177 ◽  
Author(s):  
Mehdia Ajana. El Khaddar ◽  
Hamid Harroud ◽  
Mohammed Boulmalf ◽  
Mohammed El Koutbi
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Radio Frequency Identification ◽  
Human Error ◽  
Labor Cost ◽  
Customer Relationship ◽  
Rfid Technology ◽  
Supply Chain Networks ◽  
Frequency Identification ◽  
Key Issues

Radio Frequency Identification (RFID) has been used since the Second World War to identify “friend or foe” aircrafts. It has become an enabling wireless technology that is widely used in a number of application areas, such as product tracking through manufacturing and assembly, inventory control, and supply chain management (SCM). By 2006, Wal-Mart used RFID for all of its suppliers. The use of RFID in supply chain networks has allowed Wal-Mart to create value through greater visibility in its networks, higher product velocity, reduce human error and labor cost, and more efficient inventory management, which led to the achievement of Quick Response (QR) and improved Customer Relationship Management (CRM) in the supply chain. However, RFID system challenges and uncertain Return-On-Investment (ROI) must be overcome to fully achieve these objectives. This paper introduces RFID technology and its key components and concepts, and presents an RFID middleware solution called FlexRFID that achieves the maximum benefits of RFID technology independently of the interested backend applications. This paper illustrates how RFID technology is used to solve the main problems in SCM, the advantages and key issues when implementing RFID in SCM networks, and the relationship between RFID and the main SCM processes.

scholarly journals Investment Decision of Blockchain-based Traceability Service Input in a Competitive Agri-food Supply Chain

2021 ◽  
Author(s):  
Pan Liu ◽  
Zhang Ziran ◽  
Li Ye
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Product Quality ◽  
Food Supply ◽  
Price Competition ◽  
Threshold Value ◽  
Perceived Quality ◽  
Quality And Safety ◽  
Food Supply Chain ◽  
Product Quality And Safety

Abstract Applications of the blockchain-based traceability service (hereafter, BBTS) will not only help members of high-quality agri-food supply chain (hereafter, FPSC) improve consumers' perception on product quality and safety, but also increase their extra expenditure. Competitive AFSC as an important component of AFSC, its investment and coordination laws after using the BBTS obtain more attentions. To explore these laws, we constructed two competitive AFSCs, and each of them includes a supplier and a retailer. Considering the new changes of consumers' perception on product quality and safety after using the BBTS, the demand function was modified. Then, considering the BBTS costs and the new changes of consumers perceived on quality and safety, we built the income functions of chain members under the proposed three situations, i.e., 1) neither of the two supply chains invests in the BBTS, and 2) one supply chain invests in the BBTS, and 3) both supply chains invest in the BBTS. The research finds that: 1) if both of the two supply chains invest in the BBTS, supply chain members will gain a bigger threshold value sum of the BBTS costs, moreover, supply chain members will gain more benefits compared with them no investment BBTS. Thus, governments need to guide more enterprises to adopt BBTS. 2) The competitor’s perceived quality is negative with the threshold value sum of the BBTS costs. When the competitor’s perceived quality is high, investors should reduce investment costs. 3) If investors or decision makers about BBTS want to get a big the threshold value sum of the BBTS costs, they should reduce the cost optimization coefficient and avoid fierce price competition as much as possible. Results can offer a theoretical guidance of adopting BBTS for FPSC.

FlexRFID Middleware in the Supply Chain

2011 ◽  
Vol 3 (2) ◽  
pp. 19-32 ◽  
Author(s):  
M. E. Ajana ◽  
H. Harroud ◽  
M. Boulmalf ◽  
M. Elkoutbi
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Radio Frequency Identification ◽  
Human Error ◽  
Labor Cost ◽  
Customer Relationship ◽  
Rfid Technology ◽  
Supply Chain Networks ◽  
Frequency Identification ◽  
Key Issues

Radio Frequency Identification (RFID) has been used since the Second World War to identify “friend or foe” aircrafts. It has become an enabling wireless technology that is widely used in a number of application areas, such as product tracking through manufacturing and assembly, inventory control, and supply chain management (SCM). By 2006, Wal-Mart used RFID for all of its suppliers. The use of RFID in supply chain networks has allowed Wal-Mart to create value through greater visibility in its networks, higher product velocity, reduce human error and labor cost, and more efficient inventory management, which led to the achievement of Quick Response (QR) and improved Customer Relationship Management (CRM) in the supply chain. However, RFID system challenges and uncertain Return-On-Investment (ROI) must be overcome to fully achieve these objectives. This paper introduces RFID technology and its key components and concepts, and presents an RFID middleware solution called FlexRFID that achieves the maximum benefits of RFID technology independently of the interested backend applications. This paper illustrates how RFID technology is used to solve the main problems in SCM, the advantages and key issues when implementing RFID in SCM networks, and the relationship between RFID and the main SCM processes.

Inventory optimization considering the vehicle capacity and specifics of cash flows at rental storage sites

2020 ◽  
pp. 77-90
Author(s):  
V.D. Gerami ◽  
I.G. Shidlovskii
Keyword(s):  
Supply Chain ◽  
Inventory Management ◽  
Sufficient Conditions ◽  
Cash Flows ◽  
Management Systems ◽  
Cargo Capacity ◽  
Special Modification ◽  
The Cost ◽  
Necessary And Sufficient ◽  
Vehicle Capacity

The article presents a special modification of the EOQ formula and its application to the accounting of the cargo capacity factor for the relevant procedures for optimizing deliveries when renting storage facilities. The specified development will allow managers to take into account the following process specifics in the format of a simulated supply chain when managing inventory. First of all, it will allow considering the most important factor of cargo capacity when optimizing stocks. Moreover, this formula will make it possible to find the optimal strategy for the supply of goods if, also, it is necessary to take into account the combined effect of several factors necessary for practice, which will undoubtedly affect decision-making procedures. Here we are talking about the need for additional consideration of the following essential attributes of the simulated cash flow of the supply chain: 1) time value of money; 2) deferral of payment of the cost of the order; 3) pre-agreed allowable delays in the receipt of revenue from goods sold. Developed analysis and optimization procedures have been implemented to models of this type that are interesting and important for a business. This — inventory management systems, the format of which is related to the special concept of efficient supply. We are talking about models where the presence of the specified delays for the outgoing cash flows allows you to pay for the order and the corresponding costs of the supply chain from the corresponding revenue on the re-order interval. Accordingly, the necessary and sufficient conditions are established based on which managers will be able to identify models of the specified type. The purpose of the article is to draw the attention of managers to real opportunities to improve the efficiency of inventory management systems by taking into account these factors for a simulated supply chain.

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