An optimal production and shipment policy for a single-vendor single-buyer integrated system with both learning effect and deteriorating items

Abstract

The collaboration of vendor and buyer is one of the key factors for successful supply chain management. The most common strategy for a collaborative system is to propose an integrated replenishment plan aimed at maintaining a win-win partnership for both vendor and buyer. The objective of this study is to develop a production and shipment model for a system that incorporates learning effect and deteriorating items and to derive an optimal joint total cost from the integrated perspective of both vendor and buyer. A simple solution procedure is presented to determine the optimal production time and number of deliveries. A numerical example is provided to illustrate the proposed model. A sensitivity analysis is conducted to study the effect of changes in the related parameters on the optimal solution. This paper shows that the proposed integrated model can result in a significant cost reduction as compared with the independent decisions made by either vendor or buyer.

Network reliability with deteriorating product and production capacity through a multi-state delivery network

“…The number of the deteriorating products cannot be confirmed until the products arrive at the market. Deterioration is defined as decay, damage, spoilage, fragility, evaporation, obsolescence or pilferage that results in decreasing usefulness from the original products (Tsai 2011;He and Wang 2012). Therefore the intact products arriving at the market may not satisfy the demand because of natural disasters (e.g.…”

Supply chain management and management science: A successful marriage

“…Kojima et al (2008) provided modeling to evaluate performance of supply chains in the JIT environment using discrete-time Markov processes. Tsai (2011) developed a production and shipment model incorporating learning effects in an inventory situation involving deteriorating items.…”