EPQ model with scrap and backordering under Vendor managed inventory policy

Authors

  • Ata Allah Taleizadeh School of Industrial Engineering, College of Engineering, University of Tehran, Tehran, Iran
  • Maryam Esmaeili Department of Industrial Engineering, Alzahra University, Tehran, Iran
Abstract:

This paper presents the economic production quantity (EPQ) models for the imperfect quality items produced with/without the presence of shortage condition. The models are presented in a two-level supply chain composed of a single manufacturer and a single buyer to investigate the performance of vendormanaged inventory (VMI) policy. The total costs are minimized to obtain the optimal production lot size and the allowable backorder level before and after applying VMI policy. Numerical examples and sensitivity analysis based on certain parameters are performed to show the capability of the proposed supply chain model enhanced with VMI policy.

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Journal title

volume 8  issue 1

pages  85- 102

publication date 2015-02-01

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