Study On Coordination Of Supply Chain For Defective Items With A Controllable Rate

With the development of the information technology and the market economy, the competition between the enterprises is increasingly fierce. The traditional enterprise competition pattern which in their own way has gradually developed into the competition between the supply chain. The supply chain coordination has been become the key factor to improve the competitiveness of the enterprises. On the other hand, due to technical complexity and human error or other reasons, the quality of the items produced by the manufacturer is not perfect, which contains qualified products and defective products. In general, only the qualified products can be used for sales, and the defective items should be reworked or sold at a discount price or discarded directly. This will bring certain economic losses to the retailer. Therefore, the study of the coordination of supply chain for defective items with a controllable rate has the vital practical significance, the main contents of this thesis includes:(1) The coordination of supply chain for defective items with a controllable rate under the trade credit and the cost improvement mechanisms is studied. The product of the supplier contains some defective items and the defective items can be changed through investments. The trade credit and the cost improvement coordination mechanisms are adopted and a supplier’s cost optimization model is developed. Finally, a numerical example is provided to illustrate that the supply chain can be coordinated when the retailer’s cost variation changes with- in a certain range.(2) The coordination of supply chain for defective items with a controllable rate under the price discount and the profit distribution mechanisms is studied. Two coordination mechanisms are adopted and the corresponding coordination models are also developed. By the simulation experiment, the influence of the main parameters on the profit of the system is analyzed.(3) The coordination of supply chain for defective items with a controllable rate under the revenue sharing mechanisms is studied. The supplier reduces the wholesale price and the retailer returns a percentage of the income to the suppli-er. The corresponding coordination model is developed and the theoretical re-sults of the model’s solution is also given by analyzing the model. Finally, nu-merical examples are presented, and the influence of the main parameters on the supplier, the retailer and the supply chain profit is analyzed.