A production inventory model for single vendor single buyer integrated demand with multiple production setups and rework

Abstract

In this paper, an imperfect production inventory system with multi-production run for single vendor and single buyer is studied where the defective items are reworked after several production processes and there is no break down during the rework process. The model is considered for deteriorating items under two delivery policies in order to determine the delivery policy leading to the minimum holding cost of system. The objective of this model is to determine the optimal production setup, number of deliveries and lot size by minimizing the total relevant cost of the proposed vendor-buyer integrated system. To minimize the manufacturer’s and buyer’s holding cost, the supply of finished products are made in small quantities. The total relevant cost of the vendor and the buyer is derived and a numerical example is presented to demonstrate the utility of the model.