Inventory-Up-Level Joint Replenishment Model for Re-Working Materials and New Materials

Abstract

In order to reduce cost, defective products are re-worked and regarded as new sources of materials with normal production schedule in the joint replenishment problem. In this research, inventory and replenishment problems with respect to the heavy loading of inventory system and production line shutdown will be solved. The break-even upper bound of safe inventory for the risk cost of over-inventory and the ordering costs of joint replenishment are considered. In the meanwhile, the limitation of inventory will impact the cycle time of material replenishment with consideration of new materials and re-worked defective products. Within the break-even upper bound of safe inventory, this research will find the optimal replenishment model with combining new materials and re-worked defective products.