Integrated Inventory And Inspection Policies For Stochastic Demand

Integrated Inventory And Inspection Policies For Stochastic Demand. EUROPEAN JOURNAL OF OPERATIONAL RESEARCH, 158. pp. 159-169.

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In this paper, we develop integrated inventory inspection models with and without replacement of nonconforming items. Inspection policies include no inspection, sampling inspection, and 100% inspection. We consider a buyer who places an order from a supplier when his inventory level drops to a certain point, due to demand which is stochastic in nature. When a lot is received, the buyer uses some type of inspection policy. The fraction nonconforming is assumed to be a random variable following a beta distribution. The order quantity, reorder point and the inspection policy are decision variables. In the inspection policy involving determining sampling plan parameters, constraints on the buyer and manufacturer risks is set in order to obtain a fair plan for both parties. A solution procedure for determining the operating policies for inventory and inspection consisting of order quantity, sample size, and acceptance number is proposed. Numerical examples are presented to conduct a sensitivity analysis for important model parameters and to illustrate important issues about the developed models. (c) 2007 Elsevier B.V. All rights reserved.

Item Type: Article
Subjects: Systems
Department: College of Computing and Mathematics > lndustrial and Systems Engineering
Date Deposited: 14 Jun 2008 13:06
Last Modified: 01 Nov 2019 13:44