| With the further development of Internet and E-commerce, more and more enterprises regard SCM as a new management strategy to better integrate available resource. Currently, Wal-Mart, DELL, P&G, HP and other well-known international enterprises’successful implementation of SCM has also attracted many enterprises’ and academics’research on enhancing supply chain’s competitiveness.The traditional manufacturing enterprises must find a continual cost-saving way to achieve cost leadership, and then maximize their profits. The inventory cost is one of the most important costs in Supply Chain Cost, occupying about 35%. Obviously, supply chain members should strengthen cooperation with each other in the whole process to better reduce inventory cost, thus increasing supply chain profit. In addition, several findings are obtained by reviewing previous literatures. Firstly, when backorder is permitted, both vendor and buyer can benefit from this behavior. Secondly, acknowledging the existence of defective products and checking errors, and reworking or selling with a reduced price or scrapping based on the usability of a recycled defective product, are the preconditions of making correct order and production decisions. Thirdly, with the popularity of lean management, more and more enterprises prefer to deliver products in multiple batches of small quantity. Finally, the delayed payment strategy is a win-win strategy, both vendor and buyer can benefit from this strategy.Based on the above background, to optimize the total profit of the whole supply chain, the paper explores an integrated inventory model in a three-level supply chain, including single vendor, single buyer and customers, with reworking or without reworking recycled products on the condition of permitted backorder and delayed payment. Then the paper uses Game theory, Operations Research and Optimization Theory to obtain the optimal order and production strategy for the buyer and the vendor, and provides a profit-allocation system to encourage them make cooperation. Finally, the paper uses MatLab to analyze the effect of some parameters on the optimal strategy and supply chain and supply chain members’profits, and give some functional management guidelines. |
