An Inventory-production Model for Supply Chain Under Partial Backordering and Disruption

Abstract

We consider a three-level distribution network involving a raw material supplier with imperfect quality, a manufacturer and several retailers. A production-inventory model accompanied by a partial backlogging approach is developed by considering random disruptions. Any batch received from the supplier is inspected by the manufacturer and if any flaw is visited, all the goods in the inspected batch are rejected. The aim is to minimize the total cost. A heuristic algorithm is presented to compute the optimal policy.

Resilience toward supply disruptions: A stochastic inventory control model with partial backordering under the base stock policy

“… Salehi et al, 2016 developed the first EOQD while accounting for partial backordering with random disruptions. Later, Taleizadeh et al (2016) proposed a model for equivalent production systems that have three levels in the supply network and utilized a heuristic algorithm to solve the problem. Rezaei (2016) employed sampling inspection plans to find EOQ value when supplied items are imperfect.…”