The paper deals with an integrated inventory model with make- to-order policy from buyer to vendor. A variable transportation cost is used as a power function of the delivery quantity for either tapering or considering proportional rate data to maintain single-setup multi-delivery (SSMD) policy with reduced transportation cost. A two-stage inspection process is introduced by the vendor to ensure the perfect quality of product even though the first inspection process indicates a constant defective rate of imperfect production is present during the long-run production system and all defective items are reworked with some fixed cost. The aim is to minimize the total cost of the integrated inventory model by using classical optimization technique. Two numerical examples, sensitivity analysis, and graphical representations are given to illustrate the model.
Bibliographical noteFunding Information:
Area-Editor. Thanks a lot to the reviewers for their valuable comments to improve the quality of previous version of the paper. This work was support by the research fund of Hanyang University (HY-2016-P) (Project Number 201600000000282).
All Science Journal Classification (ASJC) codes
- Business and International Management
- Strategy and Management
- Control and Optimization
- Applied Mathematics