title: On intra-supply chain system with an improved distribution plan, multiple sales locations and quality assurance.
abstract: Transnational companies, operating in extremely competitive global markets, always seek to lower different operating costs, such as inventory holding costs in their intra- supply chain system. This paper incorporates a cost reducing product distribution policy into an intra-supply chain system with multiple sales locations and quality assurance studied by [Chiu et al., Expert Syst Appl, 40:2669-2676, (2013)]. Under the proposed cost reducing distribution policy, an added initial delivery of end items is distributed to multiple sales locations to meet their demand during the production unit's uptime and rework time. After rework when the remaining production lot goes through quality assurance, n fixed quantity installments of finished items are then transported to sales locations at a fixed time interval. Mathematical modeling and optimization techniques are used to derive closed-form optimal operating policies for the proposed system. Furthermore, the study demonstrates significant savings in stock holding costs for both the production unit and sales locations. Alternative of outsourcing product delivery task to an external distributor is analyzed to assist managerial decision making in potential outsourcing issues in order to facilitate further reduction in operating costs.
authors.affiliation: Department of Business Administration, Chaoyang University of Technology, Taichung, 413 Taiwan.
authors.forename: Singa Wang
authors.initials: SW
authors.lastname: Chiu
authors.affiliation: Department of Industrial Engineering and Management, Chaoyang University of Technology, Taichung, 413 Taiwan.
authors.forename: Chao-Chih
authors.initials: CC
authors.lastname: Huang
authors.affiliation: Department of Industrial Engineering and Management, Chaoyang University of Technology, Taichung, 413 Taiwan.
authors.forename: Kuo-Wei
authors.initials: KW
authors.lastname: Chiang
authors.affiliation: Department of Industrial Engineering and Systems Management, Feng Chia University, Taichung, 407 Taiwan.
authors.forename: Mei-Fang
authors.initials: MF
authors.lastname: Wu
keywords: Cost reduction distribution policy; Intra supply chain; Multiple sales locations; Optimization; Replenishment lot size