Integrated Supply Chain Inventory Model With Quality Improvement update

Cornell Notes
Lecture, reading/chapter/novel/article during class, power point, movies (if need to collect info.)
Topic: Payment Schemes for a two-level consignment stock supply chain system
Essential Question: Can the continuous review model minimize the total related cost considering the order quantity, reorder point, lead time, process quality, backorder price discount and number of shipment as decision variables?

Questions/Main Ideas: Name: ____________
Date: ___
Notes:
Variability of the set up costs and the lead. Although the theory of classical inventory model assumes that the ordering costs and the lead time cannot be varied, the article disapproves as it is possible to shorten the lead time but at a cost making it controllable.
Lead time reduction in integrated inventory model In the assumption that the lead time crash costs would be transferred to the end user and that the demand under the minimax distribution-free approach as proposed by Scarf in 1958 but Gallego and Moon perfected in 2007.
Homogenous quality of the products The model assumes that the quality of the products is the same throughout but due to some aspects like late arrivals of orders, imperfect production vendor processes, damage in transit which may cause defects in goods.
Customer compensation for waiting and production loss in the stock out period. A seller may have to offer price discounts on the goods to compensate them for waiting and the production loss in the stock out period.
Lead crashing cost as a function of reduced lead time.

The study represented the crash cost of the lead time as a representation of a lead time reduced function.
Summary:
The article commences on building on the variability of the lead costs and the costs of ordering, which it argues that the lead time can be shortened or lengthened but at a cost. The assumption is supported by scholars who believed that the lead time can be even decomposed further into components. The article is about models developed under the assumptions of controllable lead times. The article formulates the single buyer-single vendor integrated chain inventory model and concludes that the processes can be improved by using an investment function and motivates buyers for using the backorder prices. The article was aimed at reducing total expected costs and formulated an algorithm to that effect.
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