Finite Production Rate Model With Quality Assurance, Multi-customer and Discontinuous Deliveries

Abstract

This study is concerned with the replenishment-shipment decision for a multi-customer finite production rate (FPR)model with quality assurance and discontinuous deliveries. We consider that a product is manufactured by a producerand all items are screened for quality control purpose. Nonconforming items will be picked up and categorized asscrap or repairable items. The reworking will be done right after the regular production in each replenishment cycle.After the entire lot is quality assured, multiple shipments will be delivered synchronously to multi-customer in eachcycle. Each customer has its own annual product demand, unit stock holding cost, as well as fixed and variableproduct delivery costs. Mathematical modeling along with Hessian matrix equations is employed to solve the proposedmodel. A closed-form optimal replenishment-shipment policy for such a specific integrated FPR model is obtained. Anumerical example is provided to show the practical applicability of the obtained results.