Vendor - Buyer Model with Error in Quality Inspection and Selling Price Dependent Demand Rate under the Effect of Volume Agility

摘要

The objective of this study is to develop an optimal integrated model from the perspectives of vendor and buyer. The integrated production-inventory model is assumed to have a selling price dependent demand rate. This paper provides a mathematical model for determining an optimal vendor-buyer inventory policy by accounting for quality inspection errors at the buyer's end and effect of volume agility at the vendor's end. The objective is to maximize the profit incurred in the supply chain. A numerical example is presented to illustrate the proposed model. Sensitivity analysis with respect to the different parameters is also discussed.