Joint optimal production-inventory model with imperfect production processes and varying deterioration rate in buoyant market (Q604773)

Summary: In this research paper, an inventory model is developed that jointly optimises cost of manufacturer and retailer under buoyant market condition. Inventory in the system at all the stages, that is, raw material, finished goods at manufacturer's end and finished goods at retailer's end deteriorate at different rates. The proposed model also considers imperfect production processes. Partial backlogging is allowed only at the retailer's end. Model considers quadratically increasing demand to reflect the buoyant market condition. The model analytically establishes percentage gain by using integrated policy over independent decisions taken by manufacturer and retailer. At the end, a numerical example is given to illustrate the theoretical results obtained. Sensitivity analysis is also carried out to validate theoretical findings.