Joint economic lot size model with quality improvement for a single supplier and a single buyer cooperative collaboration
Saraswati D.a,b, Cakravastia A.a, Iskandar B.P.a, Halim A.H.a
a Department of Industrial Engineering, Bandung Institute of Technology, Bandung 40132, Indonesia
b Department of Industrial Engineering, Trisakti University, Jakarta 11440, Indonesia
Abstract
This paper explores the impact of quality improvement on joint economic lot size (JELS) models. It begins with the individual optimality of a supplier, which makes the deliveries during the production period, as soon as the quantity is equal to the batch size. The individual optimality of the buyer is based on the Economics Order Quantity (EOQ) model, whereas the supplier is based on the Economic Manufacturing Quantity (EMQ). A cooperative collaboration is stated based on a long-term agreement for sharing information. The result of the study shows that the JELS with quality improvement will provide smaller sub-lot sizes and lower joint total cost of 2.25% compares to the JELS without quality improvement. The purpose of quality improvement is to increase the proportion of conforming items. The result shows this proportion can only be improved under 0.879 and this value depends on the parameters in the investment function. ©2009 IEEE.
Author keywords
Batch sizes,Economic lot size model,Economic manufacturing quantity,Economic order quantity,Lot size,Order quantity,Quality improvement,Sharing information
Indexed keywords
Economic manufacturing quantity,Economic order quantity,Joint economic lot size,Quality-adjusted