Improvement of Inventory Control for Defective Goods Supply Chain by Available Time Limitation of the Production Facilities

Abstract

One of the most important competitive criteria in the global marketplace is keeping the customer satisfaction. Timely delivery and cost of finished goods are two important factors for satisfaction of customers. In this study, we proposed a mathematical model to improve inventory control of defective goods supply chain by Available Time Limitation (ATL) of the production facilities. The defective goods are reworking able parts and the rest are considered as scraps. The aim of the model is to optimize the total costs of production, maintenance, freight, reworking, the quantity of scrap goods and shortage in retailers for three level supply chains. The uniqueness is that it can anticipate the active manufacturers/distributors and the quantity of goods that must be exchanged between them. Finally, the model determines the Economic Production Quantity (EPQ) and appropriate ATL of any production facilities. Our proposed model is novel and we used CPLEX and LINGO to solve the problem. It can be ascertained that based on the results of the model validated the correctness and fine function of the model.