Using the algebraic approach to determine the replenishment optimal policy with defective products, backlog and delay of payments in the supply chain management

Jun Li; Hairong Feng; Kun-Jen Chung

doi:10.3934/jimo.2012.8.263

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January 2012, 8(1): 263-269. doi: 10.3934/jimo.2012.8.263

Using the algebraic approach to determine the replenishment optimal policy with defective products, backlog and delay of payments in the supply chain management

Jun Li ^1, , Hairong Feng ^1, and Kun-Jen Chung ^2,

1.	School of Economics and Management, Southwest Jiaotong University, Chengdu, Sichuan 610031
2.	College of Business, Chung Yuan Christian University, Chung Li 32023, Taiwan

Received October 2009 Revised October 2011 Published November 2011

Abstract
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Li et al. [Journal of Industrial and Management Optimization 5 (2009) 867-880] develop a model to determine an optimal replenishment policy with defective items and shortage backlogging under conditions of permissible delay in payments. They used the optimization technique based on differential calculus to determine an optimal replenishment policy. The main purpose of this paper is to solve the inventory problem in Li et al. (2009) by the algebraic method to simplify the solution procedures.

Keywords: Inventory, backlogging, permissible delay of payments., shortages, defective items.

Mathematics Subject Classification: 90B0.

Citation: Jun Li, Hairong Feng, Kun-Jen Chung. Using the algebraic approach to determine the replenishment optimal policy with defective products, backlog and delay of payments in the supply chain management. Journal of Industrial & Management Optimization, 2012, 8 (1) : 263-269. doi: 10.3934/jimo.2012.8.263

References:

[1]	L. E. Cárdenas-Barrón, Observation on: Economic production quantity model for items with imperfect quality,, International Journal of Production Economics, 67 (2000), 201. doi: 10.1016/S0925-5273(00)00059-1. Google Scholar
[2]	L. E. Cárdenas-Barrón, A simple method to compute economic order quantities: Some observations,, Applied Mathematical Modelling, 34 (2010), 1684. doi: 10.1016/j.apm.2009.08.024. Google Scholar
[3]	B. E. Castello and A. J. Goldman, EOQ rides again!,, Perspectives in Operations Research, 36 (2006), 307. doi: 10.1007/978-0-387-39934-8_18. Google Scholar
[4]	W. M. Chan, R. N. Ibrahim and P. B Lochert, A new EPQ model: Integrating lower pricing rework and reject situations,, Production Planning and Control, 14 (2003), 588. doi: 10.1080/09537280310001626179. Google Scholar
[5]	H.-C. Chang, An application of fuzzy sets theory to the EOQ model with imperfect quality items,, Computers and Operations Research, 31 (2004), 2079. doi: 10.1016/S0305-0548(03)00166-7. Google Scholar
[6]	H. C. Chang and C. H. Ho, Exact closed-form solutions for optimal inventory model for items with imperfect quality and shortage backlogging,, Omega, 38 (2010), 233. doi: 10.1016/j.omega.2009.09.006. Google Scholar
[7]	S. K. J. Chang, J. P. C. Chuang and H. J. Chen, Short comments on technical note-the EOQ and EPQ models with shortages derived without derivatives,, International Journal of Production Economics, 97 (2005), 241. doi: 10.1016/j.ijpe.2004.07.002. Google Scholar
[8]	L. H. Chen and F. S. Kang., Coordination between vendor and buyer considering trade credit and items with imperfect quality,, International Journal of Production Economics, 123 (2010), 52. Google Scholar
[9]	K.-J. Chung, C. C. Her and S. D. Lin, A two-warehouse inventory model with imperfect quality production processes,, Computers and Industrial Engineering, 56 (2009), 193. doi: 10.1016/j.cie.2008.05.005. Google Scholar
[10]	K.-J. Chung and C.-K. Huang, An ordering policy with allowable shortage and permissible delay in payments,, Applied Mathematical Modelling, 33 (2009), 2518. doi: 10.1016/j.apm.2008.07.016. Google Scholar
[11]	K.-J. Chung and Y. F. Huang, Retailer's optimal cycle times in the EOQ model with imperfect quality and a permissible credit period,, Quality and Quantity, 40 (2006), 59. doi: 10.1007/s11135-005-5356-z. Google Scholar
[12]	A. Eroglu and G. Ozdemir, An economic order quantity model with defective items and shortages,, International Journal of Production Economics, 106 (2007), 544. doi: 10.1016/j.ijpe.2006.06.015. Google Scholar
[13]	S. K. Goyal, Economic order quantity under conditions of permissible delay in payments,, Journal of the Operational Research Society, 36 (1985), 335. Google Scholar
[14]	S. K. Goyal and L. E. Cárdenas-Barrón, Note on: Economic production quantity model for items with imperfect quality-a practical approach,, International Journal of Production Economics, 77 (2002), 85. doi: 10.1016/S0925-5273(01)00203-1. Google Scholar
[15]	R. W. Grubbstrom and A. Erdem, EOQ with backlogging derived without derivatives,, International Journal of Production Economics, 59 (1999), 529. doi: 10.1016/S0925-5273(98)00015-2. Google Scholar
[16]	M. Khan, M. Y. Jaber, A. L. Guiffrida and S. Zolfaghari, A review of extensions of a modified EOQ model for imperfect quality items,, International Journal of Production Economics, 132 (2011), 1. doi: 10.1016/j.ijpe.2011.03.009. Google Scholar
[17]	V. B. Kreng and S. J. Tan, Optimal replenishment decision in an EPQ model with defective items under supply chain trade credit policy,, Expert Systems with Applications, 38 (2011), 9888. doi: 10.1016/j.eswa.2011.02.040. Google Scholar
[18]	J. Li, H. Feng and M. Wang, A replenishment policy with defective products, backlog and delay of payments,, Journal of Industrial and Management Optimization, 5 (2009), 867. doi: 10.3934/jimo.2009.5.867. Google Scholar
[19]	B. Maddah and M. Y. Jaber, Economic order quantity for items with imperfect quality: Revisited,, International Journal of Production Economics, 112 (2008), 808. doi: 10.1016/j.ijpe.2007.07.003. Google Scholar
[20]	Y. H. Oh and H. Hwang, Deterministic inventory model for recycling system,, Journal of Intelligent Manufacturing, 17 (2006), 423. doi: 10.1007/s10845-005-0015-8. Google Scholar
[21]	R. Ronald, G. K. Yang and P. Chu, Technical note: The EOQ and EPQ models with shortages derived without derivatives,, International Journal of Production Economics, 92 (2004), 197. doi: 10.1016/j.ijpe.2003.10.013. Google Scholar
[22]	M. K. Salameh and M. Y. Jaber, Economic production quantity model for items with imperfect quality,, International Journal of Production Economics, 64 (2000), 59. doi: 10.1016/S0925-5273(99)00044-4. Google Scholar
[23]	J.-T. Teng, A simple method to compute economic order quantities,, European Journal of Operational Research, 198 (2009), 351. doi: 10.1016/j.ejor.2008.05.019. Google Scholar
[24]	D. Varberg, E. J. Purcell and S. E. Steven, "Calculus,", 9^th edition, (0745). Google Scholar
[25]	H. M. Wee, J. Yu and M. C. Chen, Optimal inventory model for items with imperfect quality and shortage backordering,, Omega, 35 (2007), 7. doi: 10.1016/j.omega.2005.01.019. Google Scholar

show all references

References:

[1]	L. E. Cárdenas-Barrón, Observation on: Economic production quantity model for items with imperfect quality,, International Journal of Production Economics, 67 (2000), 201. doi: 10.1016/S0925-5273(00)00059-1. Google Scholar
[2]	L. E. Cárdenas-Barrón, A simple method to compute economic order quantities: Some observations,, Applied Mathematical Modelling, 34 (2010), 1684. doi: 10.1016/j.apm.2009.08.024. Google Scholar
[3]	B. E. Castello and A. J. Goldman, EOQ rides again!,, Perspectives in Operations Research, 36 (2006), 307. doi: 10.1007/978-0-387-39934-8_18. Google Scholar
[4]	W. M. Chan, R. N. Ibrahim and P. B Lochert, A new EPQ model: Integrating lower pricing rework and reject situations,, Production Planning and Control, 14 (2003), 588. doi: 10.1080/09537280310001626179. Google Scholar
[5]	H.-C. Chang, An application of fuzzy sets theory to the EOQ model with imperfect quality items,, Computers and Operations Research, 31 (2004), 2079. doi: 10.1016/S0305-0548(03)00166-7. Google Scholar
[6]	H. C. Chang and C. H. Ho, Exact closed-form solutions for optimal inventory model for items with imperfect quality and shortage backlogging,, Omega, 38 (2010), 233. doi: 10.1016/j.omega.2009.09.006. Google Scholar
[7]	S. K. J. Chang, J. P. C. Chuang and H. J. Chen, Short comments on technical note-the EOQ and EPQ models with shortages derived without derivatives,, International Journal of Production Economics, 97 (2005), 241. doi: 10.1016/j.ijpe.2004.07.002. Google Scholar
[8]	L. H. Chen and F. S. Kang., Coordination between vendor and buyer considering trade credit and items with imperfect quality,, International Journal of Production Economics, 123 (2010), 52. Google Scholar
[9]	K.-J. Chung, C. C. Her and S. D. Lin, A two-warehouse inventory model with imperfect quality production processes,, Computers and Industrial Engineering, 56 (2009), 193. doi: 10.1016/j.cie.2008.05.005. Google Scholar
[10]	K.-J. Chung and C.-K. Huang, An ordering policy with allowable shortage and permissible delay in payments,, Applied Mathematical Modelling, 33 (2009), 2518. doi: 10.1016/j.apm.2008.07.016. Google Scholar
[11]	K.-J. Chung and Y. F. Huang, Retailer's optimal cycle times in the EOQ model with imperfect quality and a permissible credit period,, Quality and Quantity, 40 (2006), 59. doi: 10.1007/s11135-005-5356-z. Google Scholar
[12]	A. Eroglu and G. Ozdemir, An economic order quantity model with defective items and shortages,, International Journal of Production Economics, 106 (2007), 544. doi: 10.1016/j.ijpe.2006.06.015. Google Scholar
[13]	S. K. Goyal, Economic order quantity under conditions of permissible delay in payments,, Journal of the Operational Research Society, 36 (1985), 335. Google Scholar
[14]	S. K. Goyal and L. E. Cárdenas-Barrón, Note on: Economic production quantity model for items with imperfect quality-a practical approach,, International Journal of Production Economics, 77 (2002), 85. doi: 10.1016/S0925-5273(01)00203-1. Google Scholar
[15]	R. W. Grubbstrom and A. Erdem, EOQ with backlogging derived without derivatives,, International Journal of Production Economics, 59 (1999), 529. doi: 10.1016/S0925-5273(98)00015-2. Google Scholar
[16]	M. Khan, M. Y. Jaber, A. L. Guiffrida and S. Zolfaghari, A review of extensions of a modified EOQ model for imperfect quality items,, International Journal of Production Economics, 132 (2011), 1. doi: 10.1016/j.ijpe.2011.03.009. Google Scholar
[17]	V. B. Kreng and S. J. Tan, Optimal replenishment decision in an EPQ model with defective items under supply chain trade credit policy,, Expert Systems with Applications, 38 (2011), 9888. doi: 10.1016/j.eswa.2011.02.040. Google Scholar
[18]	J. Li, H. Feng and M. Wang, A replenishment policy with defective products, backlog and delay of payments,, Journal of Industrial and Management Optimization, 5 (2009), 867. doi: 10.3934/jimo.2009.5.867. Google Scholar
[19]	B. Maddah and M. Y. Jaber, Economic order quantity for items with imperfect quality: Revisited,, International Journal of Production Economics, 112 (2008), 808. doi: 10.1016/j.ijpe.2007.07.003. Google Scholar
[20]	Y. H. Oh and H. Hwang, Deterministic inventory model for recycling system,, Journal of Intelligent Manufacturing, 17 (2006), 423. doi: 10.1007/s10845-005-0015-8. Google Scholar
[21]	R. Ronald, G. K. Yang and P. Chu, Technical note: The EOQ and EPQ models with shortages derived without derivatives,, International Journal of Production Economics, 92 (2004), 197. doi: 10.1016/j.ijpe.2003.10.013. Google Scholar
[22]	M. K. Salameh and M. Y. Jaber, Economic production quantity model for items with imperfect quality,, International Journal of Production Economics, 64 (2000), 59. doi: 10.1016/S0925-5273(99)00044-4. Google Scholar
[23]	J.-T. Teng, A simple method to compute economic order quantities,, European Journal of Operational Research, 198 (2009), 351. doi: 10.1016/j.ejor.2008.05.019. Google Scholar
[24]	D. Varberg, E. J. Purcell and S. E. Steven, "Calculus,", 9^th edition, (0745). Google Scholar
[25]	H. M. Wee, J. Yu and M. C. Chen, Optimal inventory model for items with imperfect quality and shortage backordering,, Omega, 35 (2007), 7. doi: 10.1016/j.omega.2005.01.019. Google Scholar

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