Scientific Research and Essays

  • Abbreviation: Sci. Res. Essays
  • Language: English
  • ISSN: 1992-2248
  • DOI: 10.5897/SRE
  • Start Year: 2006
  • Published Articles: 2768

Full Length Research Paper

Impacts of random scrap rate on production system in supply chain environment with a specific shipping policy

Feng-Tsung Cheng1, Kuang-Ku Chen2, Yuan-Shyi Peter Chiu3 and Huei-Hsin Chang4*
1Department of Industrial Engineering and Systems Management, Feng Chia University, Taichung 407, Taiwan. 2Department of Accounting, National Changhua University of Education, Changhua 500, Taiwan. 3Department of Industrial Engineering and Management, Chaoyang University of Technology, Wufong, Taichung 413, Taiwan. 4Department of Finance, Chaoyang University of Technology, Wufong, Taichung 413, Taiwan.
Email: [email protected]

  •  Accepted: 13 July 2011
  •  Published: 19 August 2011

Abstract

This paper examines impacts of random scrap rate on production system in supply chain environment with a specific n+1 distribution policy. The purpose of introducing such a specific shipping policy is to cut down inventory holding costs for both producer and customer in vendor-buyer supply chain environment. Mathematical modeling along with Hessian matrix equations is used to simultaneously determine the optimal policies for production lot-size as well as number of shipments first. Then impacts of random scrap rate on the proposed system are analyzed. Numerical example is provided to show its practical usage and to demonstrate impacts of scrap rate on the system.

 

Key words: Imperfect production system, random scrap rate, replenishment lot size.

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