Shipment Policy for an Economic Production Quantity Model Considering Imperfection and Transportation Cost

Abstract

Determining replenishment lot size and number of shipments in a traditional production setup has been of great interest among researchers during the last decades. In order to survive modern competition, the manufacturer has to make good decisions about the lot size that is to be shipped to the retailer. Recently, several researchers have developed mathematical models for modelling different real-world situations; however, these models are lacking due to a combination of imperfection in process and shipment lot sizing. Therefore, in the proposed research, shipment policy for an imperfect production setup has been developed with transportation costs taken into consideration. The model analyzed lot sizing for manufacturers and retailers with imperfections in terms of equally sized shipments. Furthermore, an all-unit-discount policy for shipment is considered in the proposed research, and at the end, numerical computation and sensitivity analyses are carried out to gain more insight into the specifications of the model.

Developing a Comprehensive Shipment Policy through Modified EPQ Model Considering Process Imperfections, Transportation Cost, and Backorders

“…The proposed work expands the most recent study of Hayat et al [30] by developing a shipment policy for the defective manufacturing system. None of the previous studies mentioned in Table 1 have considered the distributor in their model development for imperfect systems.…”

“…This is explained in Figure 2. In Figure 2, the mathematical expressions for associated costs, except distributor ordering cost, are based on the formulas derived by Sarkar et al [4], Cardenas-Barron et al [7], and Hayat et al [30], while the expressions for optimum size and number of shipments are the output of our developed models. In a manufacturing setup, imperfect products are re-processed in the same production cycle to make acceptable quality products.…”

“…Taleizadeh et al [29] developed an economic production and inventory model in a three-layer supply chain for a single-product and general demand functions. Hayat et al [30] developed a shipment policy for an imperfect production setup with transportation costs taken into consideration. The model analyzed lot-sizing for manufacturers and retailers with imperfections in terms of equal-sized shipments.…”

“…The contributions of researchers in similar areas are presented in Table 1. × × × × Cárdenas-Barrón [17] × × × × Cárdenas-Barrón et al [7] × × × Sana et al [23] × × × × Chung [21] × × × Chang et al [8] × × × Cárdenas-Barrón et al [18] × × × × Sarkar et al [4] × × × Ghasemy Yaghin et al [12] × × × × Taleizadeh et al [29] × × × × Ekici et al [13] × × × × Geri et al [14] × × × × Hayat et al [30] × Our proposed model a Imperfection in process, b Backordering, c Shipment policy, d Shipment with imperfection in process, e Shipment with imperfection in the process considering distributors.…”