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Open AccessArticle

Determining the Optimal Inventory and Number of Shipments for a Two-Resource Supply Chain with Correlated Demands and Remanufacturing Products Allowing Backorder

1
Department of Industrial Engineering and Management, National Chin-Yi University of Technology, Taichung 41170, Taiwan
2
Department of International Business, Central Taiwan University of Science and Technology, No.666, Buzih Road, Beitun District, Taichung 40601, Taiwan
*
Author to whom correspondence should be addressed.
Mathematics 2020, 8(4), 548; https://doi.org/10.3390/math8040548
Received: 23 February 2020 / Revised: 20 March 2020 / Accepted: 26 March 2020 / Published: 8 April 2020
This study develops an integrated supplier–remanufacturer and customer (downstream manufacturer) inventory model that takes into account three-echelon system with correlated demands and remanufacturing products allowing a backorder goods condition. This paper improves the observable fact that the first model system customer might select two sources from remanufactured products or supplier products without defective items. The second model further considers the defective items during the screening duration. The results are examined analytically and numerically to show that the policy of single shipment in large lot sizes results in less total cost than a frequent shipments policy. We also explore the impact of recovery rate on the economic benefits of the inventory system. In addition, we also perform sensitivity analysis to study the impact of seven important parameters (transportation cost, recovery rate, screening rate, annual demand, defect rate, and backorder rate, holding cost,) on the optimal solution. Management insights were also discussed. View Full-Text
Keywords: inventory; logistics; lot-splitting shipments; defective products; backorder rate inventory; logistics; lot-splitting shipments; defective products; backorder rate
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Ho, T.-F.; Lin, C.-C.; Lin, C.-L. Determining the Optimal Inventory and Number of Shipments for a Two-Resource Supply Chain with Correlated Demands and Remanufacturing Products Allowing Backorder. Mathematics 2020, 8, 548.

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