In this paper, we investigate the impact of inspection policy on a vendor-buyer integrated inventory system under controllable lead time. It is assumed that an arriving order lot contains some defective items, and the buyer adopts a sub-lot sampled inspection policy to inspect selected items. The number of defective items in the sub-lot sampling is a random variable. We derived an integrated inventory model with a mixture of backorders and lost sales, in which the order quantity, reorder point, lead time and the number of shipments from the vendor to the buyer are decision variables. Iterative procedure is developed to obtain the optimal production/replenishment strategy. Furthermore, the effects of parameter are also discussed.
Relation:
2005年管理科學與經營決策國際學術研討會論文集=Proceedings of the 2005 International Conference in Management Sciences and Decision Making，頁121-143
