The disruption in a production system occurs due to labor problem, machines breakdown, strikes, political issue, and weather disturbance, etc. This leads to delay in the supply of the products, resulting customer to approach other dealers for the products. This paper is an attempt to develop an economic production quantity model using optimization method for deteriorating items with production disruption. We obtained optimal production time before and after the system gets disrupted. We have also devised the model for optimizing the shortage of the products. This research is useful to determine the time for start and stop of the production when system gets disrupted. The optimal production and inventory plan are provided, so that the manufacturer can reduce the loss occurred due to disruption. Finally a graph based simulation study has been given to illustrate the proposed model.
In this study, we developed a trade credit policy for a three-layer supply chain consisting of a supplier, a manufacturer and a retailer. We propose an optimal production rate and selling price for the manufacturer and the retailer under an imperfect production system. The suggested coordination policy optimizes the profit of each supply chain member. Two models were formulated for two real-life strategies respectively. The first one is a collaborative (integrated) system and the second one is a Stackelberg leadership system. Both strategies were analyzed for various credit periods, respectively offered by the supplier to the manufacturer, by the manufacturer to the retailer, and by the retailer to the customers, by considering price-sensitive demand and a certain replenishment rate. Finally, we concluded which strategy will be better for inventory management under the given restrictions in the form of propositions. The concavity property for the net profit function was established with respect to the selling price and the production rate, which was also described graphically and analyzed by numerical examples.
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