Controllable Production Rate and Quality Improvement in a Two-Echelon Supply Chain Model

Abstract

The flexible production plays the key role within any production system. An optimization model is developed for a production system with flexible production rate within a fixed limit, defined by the management, with quality improvement in a supply chain management. The aim of the model is to obtain the best optimum production rate with the global minimum cost. It is assumed that the lead time demand follows a normal distribution and a lead time crashing cost is used to reduce the lead time. A classical optimization technique is used to solve the supply chain model. A theorem is established to obtain the global minimum total cost. A numerical example is given to illustrate the model. Numerical studies prove that this model converges over the existing literature at the global minimum cost.