OPTIMIZATION OF AN INTRA-SUPPLY CHAIN SYSTEM WITH UNRELIABLE PRODUCTION FACILITY

Hsin-Mei Chen

Open PDF

Abstract

Optimization of a manufacturer-retailer integrated type of intra-supply chain system considering unreliable production facility is explored in this study. It is assumed that a producer of consumer goods has its own sales offices, and during the fabrication process, both equipment breakdown and production of nonconforming goods seem inevitable. To explicitly address such a real intra-supply chain problem, we incorporate end products transportation cost and sales office’s stock holding cost into a prior study (Chiu [01]) with the objective of deriving the optimal fabrication runtime. Solution to the problem is obtained through the use of mathematical modeling, optimization techniques, and a proposed recursive algorithm. Applicability of research result and sensitivity analyses are demonstrated thru numerical example.

Keywords

Optimizer Manufacturer-retailer integrated system Optimal fabrication runtime Unreliable facility Intra-supply chain system Rework Multiple shipments

Acknowledgements

Authors deeply thank the Ministry of Science and Technology of Taiwan for sponsor of this study (under grant no. MOST102-2410-H-324-005).

References

1. Chiu, S.W. (2007) Production run time problem with machine breakdowns under AR control policy and rework, Journal of Scientifi c & Industrial Research, 66, pp. 979-988.

2. Taft, E.W. (1918) The most economical production lot, Iron Age, 101, pp. 1410–1412. 3. Silver, E.A., Pyke, D.F., Peterson, R. (1998) Inventory Management and Production Planning and Scheduling, John Wiley & Sons, Inc., New York.

4. Nahmias, S. (2009) Production & Operations Analysis, McGraw-Hill Inc., New York.

5. Goyal, S.K. (1977) Integrated inventory model for a single supplier-single customer problem. International Journal of Production Research, 15, pp. 107-111.

6. Schwarz, L.B., Deuermeyer, B.L., Badinelli, R.D. (1985) Fill-rate optimization in a one-warehouse N-identical retailer distribution system, Management Science, 31, pp.488-498.

7. Banerjee, A., Banerjee, S. (1994) A coordinated order-up-to inventory control policy for a single supplier and multiple buyers using electronic data interchange. International Journal of Production Economics, 35, pp. 85-91.

8. Tyan, J., Wee, H.M. (2003) Vendor managed inventory: A survey of the Taiwanese grocery industry, Journal of Purchasing & Supply Managament, 9, pp. 11-18.

9. Sarker, R.A., Khan, L.R. (1999) Optimal batch size for a production system operating under periodic delivery policy, Computers & Industrial Engineering, 37, pp. 711-730.

10. Diponegoro, A., Sarker, B.R. (2006) Finite horizon planning for a production system with permitted shortage and fi xed-interval deliveries, Computers & Operations Research, 33, pp. 2387-2404.

11. Cheng, C-B. (2011) Reverse auction with buyer-supplier negotiation using bi-level distributed programming, European Journal of Operational Research, 211, pp. 601-611.

12. Giri, B.C., Maiti, T. (2012) Supply chain model for a deteriorating product with time-varying demand and production rate, Journal of the Operational Research Society, 63, pp. 665-673.

13. Balaji, M., Velmurugan, V., Prapa, M., Mythily, V. (2016) A fuzzy approach for modeling and design of agile supply chains using interpretive structural modeling, Jordan Journal of Mechanical and Industrial Engineering, 10(1), pp. 67-74.

14. Chiu, Y-S.P., Chiang, K-W., Chiu, S.W., Song, M-S. (2016) Simultaneous determination of production and shipment decisions for a multi-product inventory system with a rework process, Advances in Production Engineering & Management, 11(2), pp. 141-151.

15. Fergany, H.A. (2016) Probabilistic multi-item inventory model with varying mixture shortage cost under restrictions, SpringerPlus, 5(1), Art. No. 1351, pp.1- 13.

16. Qu, S., Ji, Y. (2016) The worst-case weighted multi-objective game with an application to supply chain competitions, PLoS One, 11(1), Art. No. e0147341, pp. 1-22.

17. Mičieta, B., Herčko, J., Botka, M., Zrnić, N. (2016) Concept of intelligent logistic for automotive industry, Journal of Applied Engineering Science, 14(2), pp. 233-238.

18. Henig, H., Gerchak, Y. (1990) Structure of periodic review policies in the presence of random yield, Operations Research, 38, pp. 634-643.

19. Groenevelt, H., Pintelon, L., Seidmann, A. (1992) Production lot sizing with machine breakdowns, Management Science, 38, pp. 104-123.

20. Boone, T., Ganeshan, R., Guo, Y., Ord, J.K. (2000) The impact of imperfect processes on production run times, Decision Sciences, 31, pp. 773-785.

21. Lin, G.C., Gong, D-C. (2006) On a production-inventory system of deteriorating items subject to random machine breakdowns with a fi xed repair time, Mathematical and Computer Modelling, 43, pp. 920-932.

22. Sana, S.S., Chaudhuri, K. (2010) An EMQ model in an imperfect production process, International Journal of Systems Science, 41, pp. 635-646.

23. Barlow, R.E., Proschan, F. (1965) Mathematical Theory of Reliability. Wiley, New York.

24. Shih, W., 1980. Optimal inventory policies when stock-outs result from defective products. International Journal of Production Research, 18, pp. 677-686.

25. Hariga, M., Ben-Daya, M. (1998) Note: the economic manufacturing lot-sizing problem with imperfect production processes: bounds and optimal solutions, Naval Research Logistics, 45, pp. 423-433.

26. Wee, H.M., Yu, J., Chen, M.C. (2007) Optimal inventory model for items with imperfect quality and shortage back ordering, Omega, 35, pp. 7-11.

27. Widyadana, G.A., Wee, H.M. (2012) An economic production quantity model for deteriorating items with preventive maintenance policy and random machine breakdown, International Journal of Systems Science, 43(10), pp. 1870-1882.

28. Rivera-Gómez, H., Gharbi, A., Kenné, J.P. (2013) Production and quality control policies for deteriorating manufacturing system, International Journal of Production Research, 51(11), pp. 3443-3462.

29. Chiu, S.W., Kuo, J-S., Chiu, V., Chiu, Y-S.P. (2016) Cost minimization for a multi-product fabrication-distribution problem with commonality, postponement, and quality assurance. Mathematical and Computational Applications, 21(3), Art. No. 38, pp. 1-17.

30. Dinesh, K.S., Ashwanth, A.R., Karthikeyan, S., Nithyanandam, G.K. (2016) Investigation to improve the new product development process of mono block pump using additive manufacturing, International Journal of Mechanical and Production Engineering Research and Development, 6(2), pp. 77-88.

31. Romero-Jabalquinto, A., Velasco-Téllez, A., Zambrano-Robledo, P., Bermúdez-Reyes, B. (2016) Feasibility of manufacturing combustion chambers for aeronautical use in Mexico, Journal of Applied Research and Technology, 14(3), pp. 167-172.

32. Sinaga, S., Pertiwi, L.S., Ardian, T., Zuhri. (2016) Inventory simulation optimization under non stationary demand, International Journal of Applied Engineering Research, 11(1), pp. 524- 529.

33. Zhang, D., Zhang, Y., Yu, M. (2016) A machining process oriented modeling approach for reliability optimization of failure-prone manufacturing systems, Journal of Engineering Research, 4(3), pp. 128-143.

34. Dhaiban, A.K., Baten, M.A., Aziz, N. (2017) A manufacturing- inventory control model with defective and deteriorating items, Far East Journal of Mathematical Sciences, 101(8), pp. 1691-1709.

35. Chiu, S.W., Liu, C-J., Li, Y-Y., Chou, C-L. (2017) Manufacturing lot size and product distribution problem with rework, outsourcing, and discontinuous inventory distribution policy, International Journal for Engineering Modelling, 30(1-4), pp. 49-61.

36. Khanna, A., Kishore, A., Jaggi, C.K. (2017) Strategic production modeling for defective items with imperfect inspection process, rework, and sales return under two-level trade credit, International Journal of Industrial Engineering Computations, 8(1), pp. 85-118.

37. Ajbar, A., Ali, E. (2017) Study of advanced control of ethanol production through continuous fermentation, Journal of King Saud University - Engineering Sciences, 29(1), pp. 1-11.

38. Oblak, L., Kuzman, M.K., Grošelj, P. (2017) A fuzzy logic-based model for analysis and evaluation of services in a Manufacturing company, Journal of Applied Engineering Science, 15(3), pp. 258-271.

39. Buckova, M., Krajcovic, M., Jerman, B. (2017) Impact of digital factory tools on designing of warehouses, Journal of Applied Engineering Science, 15 (2), pp. 173 - 180.