Integrated decision models for a vendor–buyer supply chain with inspection errors and purchase and repair options

Abstract

Improving the performance of supply chains is imperative in the contemporary competitive business environment. Integrated decision models incorporating various important aspects and decision variables into a single model are desired towards this end. An important issue lacking in the supply chain literature relates to the incorporation of such quintessential and omnipresent supply chain practices as repairing or replacing non-conforming items supplied by the vendor. Specifically, this paper proposes two integrated models. The first model incorporates the notion of repairing non-conforming items supplied by the vendor at the site of the buyer/manufacturer. The second model incorporates the notion of replacing non-conforming items supplied by the vendor through local purchases at the site of the buyer/manufacturer. Illustrative examples and sensitivity analyses are provided to demonstrate the model application, efficacy, and managerial insights. Some very interesting and challenging future research directions are also provided.