The article investigates an integrated multi-layer supply chain model consisting of supplier, manufacturer and retailer while supply disruption, machine breakdown, safety stock, maintenance breakdown occur simultaneously. At beginning of the production, manufacturer keeps some raw materials in stock received from second supplier at high price, as safety stock due to supply disruption of first supplier. Corrective maintenance is done immediately to restore its normal stage when machine breakdown occurs. Stock out situations at manufacturer and retailer are considered due to disruption of production for machine breakdown. The integrated expected costs of the chain in centralized (collaborating) and decentralized (Stakelberg approach) system are compared. A numerical example and its sensitivity analysis are provided to test feasibility of the model.
Supply chain management plays an important and critical role in any business organization in increasing competition and globalization. In last two decades, multi-stage supply chain management has received a very visible and influential research topics in the field of operations research. In the real world, a chain faces a lot of real problems like supply disruption, production system breakdown, shortages of product, etc. Manufacturing process is one of the most important part to the companies for their business strategy. Careful production planning is necessary to ensure good deliveries and productive efficiencies. The key factors of the production system are planning, organizing, directing and controlling of production activities. Machine breakdown, supply disruptions, shortages of products are common but vital factors for the companies. The researchers and practitioners are facing tough challenging condition to find out the best strategies on production disruption and supply disruption. The maintenance scheduling of systems, safety stock of the products, involving secondary members, etc. may be implemented to rescue from supply disruption and production disruption. Generally speaking, textile, footwear, electronics, etc. industries face such type of bottlenecks. In these industries, raw materials are transported from far side. Consequently, supply disruptions due to transportation problem, labor strike, natural problem, etc. are common factors. In such situations, manufacturers keep stock the raw materials for continuing production process. Moreover, production system disruption is common for all industries due to uncertain machine breakdown. As a whole, the entire channel faces stock out situations. Now, our aim is to study a supply chain model considering the important factors supply disruption, machine breakdown, corrective maintenance, safety stock, backlogging, multi-echelon supply chain.
the multi-echelon production inventory model, we have investigated the optimal ordering lot-size for the integrated expected costand manufacturer Stakelberg approach of the model where supplier, manufacturer’s warehouse, manufacturer and retailer are present inthe chain. In Stakelberg approach, manufacturer is the decision maker and other members are the followers of the manufacturer. In thepresent model, supply disruption may be occurred after a random time by different reasons (transportation problem, labor strick, naturalproblem, etc.) and supply of raw materials by supplier be stopped by the disruption. At beginning, warehouse of manufacturer stores safetystock of raw material avoiding the effect of supply disruption within production run-time. Also, the warehouse stores the raw materialwhen the production system breakdown be happened before supply disruption within actual regular production run-time. The productionsystem starts again after a random recovery time from the time of breakdown. For the effect of machine breakdown of production system,the inventory of finished good of manufacturer and retailer may fall into shortage. We compare the integrated expected cost model ofthe chain to the Stakelberg model where manufacturer is leader and other are follower. We also investigate the sensitivity of the keyparameters for the model. The major contribution of the supply chain are introducing supply disruption, safety stock of manufacturer’sware house and production system breakdown in a multi-echelon supply chain. Also, we consider shortage of inventory of manufacturerand retailer which is another important contribution. These new contributions fill up the gap of the existing literature. The present modelhas many limitations. These are one time disruption of supply and machine break down, deterministic production rate and supply orderand deterministic demand of the end customers. The model can be extended relaxing the above limitations in many ways: We could studyour model immediately with stochastic market demand or price dependent market. It might be interesting to consider trade credit policy,inflation or different contracts among the members. Also we can extend the model with multiple items. Moreover, multi-supplier andmulti-retailer levels may also be introduced in our model.
