Environment and Finance Effects in Supply Chains With Alternative Shipment Strategies

Introduction

For companies in production or sales, including those in supply chains, the quality of products is crucial issue. In production, quality is a key factor in cost and efficiency. In sales, quality is the principal determinant of customer satisfaction. The two main models traditionally used, i.e., economic production quantity (EPQ) and economic order quantity (EOQ), are based on a perfect production process and do not consider product quality. In reality, though, a situation like this is not achievable; in practice, it is inevitable that defective product result from any production environment. Therefore, it is unrealistic to calculate optimal quantities for production or orders from these traditional models because they ignore the effects of defective products on quantities produced and ordered. Consequently, a lot of attention has been paid to inventory models that consider defective products (Porteus, 1986; Rosenblatt and Lee, 1986; Salameh and Jaber, 2000; Chan et al., 2003; Chiu, 2003; Yoo et al., 2009; Cárdenas-Barrón, 2009; Jaggi et al., 2013; Jaber et al., 2014; Bose and Guha, 2021; Sepehri and Gholamian, 2023). In addition, alongside the increasing use of Just-In-Time (JIT) and Supply Chain Management (SCM), many researchers have studied integrated inventory models that have been developed with a view to cooperation between vendors or manufacturers and retailers (Goyal, 1976; Banarjee, 1986; Hill, 1997; Goyal and Nebebe, 2000; Glock, 2012; Bushuev et al., 2015).