Optimal ordering and recovery policy in a periodic review integrated inventory model. Issue 4 (1st October 2016)

• Record Type: Journal Article
• Authors: Lin, Yu-Jen; Lin, Hsien-Jen
• Is Part Of: International journal of systems science. Volume 3:Issue 4(2016)
• Page Start: 200
• Page End: 210
• Publication Date: 2016-10-01
• Subjects: periodic review -- protection interval -- defective items -- lead time -- recovery; Operations research -- Periodicals; Logistics -- Periodicals; System analysis -- Periodicals; 003
• DOI: 10.1080/23302674.2015.1080316
• Languages: English
• ISSNs: 2330-2674

Abstract

Abstract : The present article investigates a single-supplier–single-retailer integrated inventory problem, where the supplier and the retailer establish a long-term strategic partnership and contract to jointly determine the best strategy. We analyse a periodic review integrated inventory model in which the supplier inspects each lot product; if defective items are recoverable then recovered instantaneously for reuse, but otherwise disposed. In addition, we take a service level constraint instead of a stock-out cost term into consideration, which implies that the stock-out level per cycle is bounded, and further treat the ordering cost as one of the decision variables to widen applications for our model. The objective of this paper is to minimise the joint expected annual total cost by simultaneously optimising the review period, the ordering cost, the lead time as well as the number of shipments from the supplier to the retailer in one production run. We present a procedure to find the optimal solution for the model; furthermore, the effects of parameters are studied as well. Finally, numerical examples are given to illustrate the results.