Research On Consignment Stock Model Considering Reworking Of Defective Items

The consignment stock is a style of inventory management of a supply chain wherethe vendor and buyer coordinate. Consignment stock policy has already beenwidespread as an industrial practice in different environments for years, but thereappears to be very little theoretical researches about it at present. A basic assumption infew papers about consignment stock is that the defective items won t be manufacturedin a perfect production process. In the actual production process, the generation ofdefective items is inevitable and bound to increase the cost. And disposal at adiscounted price of defective items is another handing except for the reworking.This thesis researches the consignment stock model considering the reworking ofthe defective items for a single-vendor and single-buyer system. According to literaturereview on integrated production inventory, consignment stock and defective items, thefeatures and framework of the consignment stock are summarized. The impacts ofdefective items on the cost of both the two parts and the whole system haven t beeninvestigated in most works of consignment stock. Therefore, to bridge the gap betweentheory and practice, three modified models are gradually presented base on the basemodel developed by Braglia and Zavanella (2003), respectively. The first one is theconsignment stock model without holding defective items (MCS1model), the second isthe model considering a discounted price (MCS2model), the third is the consignmentstock model considering reworking of defective items (MCS3model) and the last one isthe model considering reworking under minor setups (MCS4model). And then themodified models are simulated in a numerical example. The results show that no matterwhat value defective factor is, reworking is more advantageous to optimal cost ofsystem compared with a discounted price. While, different strategies should be selectedin different ranges of defective factor. Finally, the conclusion and limitation of themodified model are summarized, and future work is pointed out for furtherinvestigations.