Inventory and pricing decisions for imperfect quality items with inspection errors, sales returns, and partial backorders under inflation
RAIRO - Operations Research - Recherche Opérationnelle, Tome 54 (2020) no. 1, pp. 287-306.

In this paper, an optimal replenishment inventory policy for imperfect quality items is presented with a selling price-dependent demand under inflationary conditions using a discounted cash flow (DCF) approach. Due to the presence of defectives in the system, all items go through a 100% inspection process. However, the screening process is also considered to be imperfect and involves errors, namely Type-I and Type-II. In addition, shortages are allowed and are partially backlogged. An optimal solution for the proposed model is derived by maximizing the expected profit function by jointly optimizing three decision variables: selling price, order quantity, and backorder level. To validate the theoretical results, a numerical example along with comprehensive sensitivity analysis is offered. The model has pertinence in industries like textiles, electronics, furniture, footwear, automobiles, and plastics.

Reçu le :
Accepté le :
Première publication :
Publié le :
DOI : 10.1051/ro/2018102
Classification : 90B05
Mots-clés : Inventory, Screening errors, Time value of money, Partial Backlogging, Selling price-dependent demand
@article{RO_2020__54_1_287_0,
     author = {Khanna, Aditi and Kishore, Aakanksha and Sarkar, Biswajit and Jaggi, Chandra K.},
     title = {Inventory and pricing decisions for imperfect quality items with inspection errors, sales returns, and partial backorders under inflation},
     journal = {RAIRO - Operations Research - Recherche Op\'erationnelle},
     pages = {287--306},
     publisher = {EDP-Sciences},
     volume = {54},
     number = {1},
     year = {2020},
     doi = {10.1051/ro/2018102},
     mrnumber = {4062455},
     zbl = {1437.90012},
     language = {en},
     url = {http://www.numdam.org/articles/10.1051/ro/2018102/}
}
TY  - JOUR
AU  - Khanna, Aditi
AU  - Kishore, Aakanksha
AU  - Sarkar, Biswajit
AU  - Jaggi, Chandra K.
TI  - Inventory and pricing decisions for imperfect quality items with inspection errors, sales returns, and partial backorders under inflation
JO  - RAIRO - Operations Research - Recherche Opérationnelle
PY  - 2020
SP  - 287
EP  - 306
VL  - 54
IS  - 1
PB  - EDP-Sciences
UR  - http://www.numdam.org/articles/10.1051/ro/2018102/
DO  - 10.1051/ro/2018102
LA  - en
ID  - RO_2020__54_1_287_0
ER  - 
%0 Journal Article
%A Khanna, Aditi
%A Kishore, Aakanksha
%A Sarkar, Biswajit
%A Jaggi, Chandra K.
%T Inventory and pricing decisions for imperfect quality items with inspection errors, sales returns, and partial backorders under inflation
%J RAIRO - Operations Research - Recherche Opérationnelle
%D 2020
%P 287-306
%V 54
%N 1
%I EDP-Sciences
%U http://www.numdam.org/articles/10.1051/ro/2018102/
%R 10.1051/ro/2018102
%G en
%F RO_2020__54_1_287_0
Khanna, Aditi; Kishore, Aakanksha; Sarkar, Biswajit; Jaggi, Chandra K. Inventory and pricing decisions for imperfect quality items with inspection errors, sales returns, and partial backorders under inflation. RAIRO - Operations Research - Recherche Opérationnelle, Tome 54 (2020) no. 1, pp. 287-306. doi : 10.1051/ro/2018102. http://www.numdam.org/articles/10.1051/ro/2018102/

[1] P.L. Abad and C.K. Jaggi, A joint approach for setting unit price and the length of the credit period for a seller when end demand is price sensitive. Int. J. Prod. Econ. 83 (2003) 115–122. | DOI

[2] H. Bierman and J. Thomas, Inventory decisions under inflationary conditions. Decis. Sci. 8 (1977) 151–155. | DOI

[3] S. Bose, A. Goswami and K.S. Chaudhuri, An EOQ model for deteriorating items with linear time-dependent demand rate and shortages under inflation and time discounting. J. Oper. Res. Soc. 46 (1995) 771–782. | DOI | Zbl

[4] J.A. Buzacott, Economic order quantities with inflation. Oper. Res. Q. 26 (1975) 553–558. | DOI

[5] H.C. Chang and C.H. Ho, Exact closed-form solutions for “optimal inventory model for items with imperfect quality and shortage backordering”. Omega 38 (2010) 233–237. | DOI

[6] S.O. Duffuaa and M. Khan, Impact of inspection errors on the performance measures of a general repeat inspection plan. Int. J. Prod. Res. 43 (2005) 4945–4967. | DOI | Zbl

[7] A. Eroglu and G. Ozdemir, An economic order quantity model with defective items and shortages. Int. J. Prod. Econ. 106 (2007) 544–549. | DOI

[8] M. Ghoreishi, A. Mirzazadeh and G.W. Weber, Optimal pricing and ordering policy for non-instantaneous deteriorating items under inflation and customer returns. Optimization 63 (2014) 1785–1804. | DOI | MR | Zbl

[9] M. Ghoreishi, A. Mirzazadeh, G.W. Weber and I. Nakhai-Kamalabadi, Joint pricing and replenishment decisions for non-instantaneous deteriorating items with partial backlogging, inflation-and selling price-dependent demand and customer returns. Management 11 (2015) 933–949. | MR | Zbl

[10] J.T. Hsu and L.F. Hsu, An EOQ model with imperfect quality items, inspection errors, shortage backordering, and sales returns. Int. J. Prod. Econ. 143 (2013) 162–170. | DOI

[11] C.K. Jaggi, K.K. Aggarwal and S.K. Goel, Optimal order policy for deteriorating items with inflation induced demand. Int. J. Prod. Econ. 103 (2006) 707–714. | DOI

[12] C.K. Jaggi and A. Khanna, The retailer’s procurement policy with credit-linked demand under inflationary conditions. Int. J. Procurement Manage. 2 (2009) 163–179. | DOI

[13] C.K. Jaggi, M. Mittal and A. Khanna, Effects of inspection on retailer’s ordering policy for deteriorating items with time-dependent demand under inflationary conditions. Int. J. Syst. Sci. 44 (2013) 1774–1782. | DOI | MR | Zbl

[14] M. Khan, M.Y. Jaber and M. Bonney, An economic order quantity (EOQ) for items with imperfect quality and inspection errors. Int. J. Prod. Econ. 133 (2011) 113–118. | DOI

[15] M.S. Kim, J.S. Kim, B. Sarkar, M. Sarkar and M.W. Iqbal, An improved way to calculate imperfect items during long-run production in an integrated inventory model with backorders. J. Manuf. Syst. 47 (2018) 153–167. | DOI

[16] I. Konstantaras, K. Skouri and M.Y. Jaber, Inventory models for imperfect quality items with shortages and learning in inspection. Appl. Math. Model. 36 (2012) 5334–5343. | DOI | MR | Zbl

[17] B. Maddah and M.Y. Jaber, Economic order quantity for items with imperfect quality: revisited. Int. J. Prod. Econ. 112 (2008) 808–815. | DOI

[18] B. Maddah, M.K. Salameh and L. Moussawi-Haidar, Order overlapping: a practical approach for preventing shortages during screening. Comput. Ind. Eng. 58 (2010) 691–695. | DOI

[19] R.B. Misra, A study of inflationary effects on inventory systems. Logistics Spectr. 9 (1975) 51–55.

[20] R.B. Misra, A note on optimal inventory management under inflation. Naval Res. Logistics (NRL) 26 (1979) 161–165. | DOI | Zbl

[21] B. Mondal, A.K. Bhunia and M. Maiti, An inventory system of ameliorating items for price dependent demand rate. Comput. Ind. Eng. 45 (2003) 443–456. | DOI

[22] I. Moon and S. Lee, The effects of inflation and time-value of money on an economic order quantity model with a random product life cycle. Eur. J. Oper. Res. 125 (2000) 588–601. | DOI | MR | Zbl

[23] M. Palanivel and R. Uthayakumar, Finite horizon EOQ model for non-instantaneous deteriorating items with price and advertisement dependent demand and partial backlogging under inflation. Int. J. Syst. Sci. 46 (2015) 1762–1773. | DOI | MR | Zbl

[24] S. Papachristos and I. Konstantaras, Economic ordering quantity models for items with imperfect quality. Int. J. Prod. Econ. 100 (2006) 148–154. | DOI

[25] E.L. Porteus, Optimal lot sizing, process quality improvement and setup cost reduction. Oper. Res. 34 (1986) 137–144. | DOI

[26] M.J. Rosenblatt and H.L. Lee, Economic production cycles with imperfect production processes. IIE Trans. 18 (1986) 48–55. | DOI

[27] M.D. Roy, S.S. Sana and K. Chaudhuri, An economic order quantity model of imperfect quality items with partial backlogging. Int. J. Syst. Sci. 42 (2011) 1409–1419. | DOI | MR | Zbl

[28] M.K. Salameh and M.Y. Jaber, Economic production quantity model for items with imperfect quality. Int. J. Prod. Econ. 64 (2000) 59–64. | DOI

[29] S.S. Sana, A production-inventory model of imperfect quality products in a three-layer supply chain. Decis. Support Syst. 50 (2011) 539–547. | DOI

[30] B. Sarkar and I. Moon, An EPQ model with inflation in an imperfect production system. Appl. Math. Comput. 217 (2011) 6159–6167. | MR | Zbl

[31] B. Sarkar, Supply chain coordination with variable backorder, inspections, and discounts policy for fixed lifetime products. Math. Prob. Eng., Article ID. 6318737 (2016) 1–14. | MR | Zbl

[32] B. Sarkar and S. Saren, Product inspection policy for an imperfect production system with inspection errors and warranty cost. Eur. J. Oper. Res. 248 (2016) 263–271. | DOI | Zbl

[33] R.L. Schwaller, EOQ under inspection costs. Prod. Inventory Manage. J. 29 (1988) 22–24.

[34] P.K. Sharma, Survey of inventory models with inflation. PARIPEX-Indian J. Res. 5 (2016).

[35] J. Taheri-Tolgari, A. Mirzazadeh and F. Jolai, An inventory model for imperfect items under inflationary conditions with considering inspection errors. Comput. Math. Appl. 63 (2012) 1007–1019. | DOI | MR | Zbl

[36] M. Tayyab and B. Sarkar, Optimal batch quantity in a cleaner multi-stage lean production system with random defective rate. J. Cleaner Prod. 139 (2016) 922–934. | DOI

[37] H.M. Wee, J. Yu and M.C. Chen, Optimal inventory model for items with imperfect quality and shortage backordering. Omega 35 (2007) 7–11. | DOI

Z. Youjun, Yan Z. and Liang C., An inventory model with advance sales and demand rate dependent on price. In: Service Systems and Service Management (ICSSSM), 12th International Conference on IEEE (2015) 1–5.

[39] X. Zhang and Y. Gerchak, Joint lot sizing and inspection policy in an EOQ model with random yield. IIE Trans. 22 (1990) 41–47. | DOI

Cité par Sources :