An Integrated Vendor-buyer Inventory Model With Transportation Cost And Imperfect Quality For Short-life Cycle Product

In the 21st century, with the development of information, supply chain management has been full of temptation. It is a symbol of management and a new productivity. Supply chain management has given us not only a new management tools, but also more importantly the opportunity of updating management and raising awareness. Meanwhile, it provides a new way to re-plan, design and optimize the business processes. The integral supply chain coordination has been regarded as the core strategy for an enterprise to win. During the constant process of the pursuit for a faster speed, a lower price and a nicer service, the managers recognize that it is difficult to reach the goal only by working isolated. Conversely, to reach the aim, each company must work together on the basis of cooperation.The purpose of this thesis is to study supply chain coordination by the use of optimization theory and algorithm.This thesis uses the optimization theory and methods to research short-life cycle product integration model based on imperfect production processes and quantity discounts.First, the thesis establishes a single system model for optimal economic lot based on imperfect production processes, repair cost and warranty cost .The model's assumptions is that once the production process goes out of control, the production process produces some defective items and it lasts at the end of the production unless machine repair. Finally, this thesis analyzed the influences of the machine failure rate, repair costs and warranty cost for optimal production quantities and units of the total cost.meanwhile, generally product and hort-life cycle product for the difference of production strategies have been compared and we get some value conclusion.Numerical example was provided to illustrate the solution procedure.Then,based on previous model, a two-stage supply chain model have been established, transportation costs as an important part of the total costs. Our result shows that good quantity strategy will force the supply chain to be coordinated.