A Supply Chain Model with Learning Effect and Credit Financing Policy for Imperfect Quality Items under Fuzzy Environment

Abstract

In this paper, the seller offers a credit period to his buyer for more sales and the buyer accepts the seller’s policy to gain more profit, and it is assumed that the seller has defective and non-defective items. When the seller provides lots for sale to his buyer then, the buyer separates the whole lots with the help of inspection process into defective and perfect quality items. Further, in this scenario, the percentage of defective items present in the lot follows the S-shape learning curve and it is also considered that the demand rate is imprecise in nature. Here, the demand rate assumes a triangular fuzzy number due to the imprecise nature and it is the model assumption. Based on this assumption, we developed an inventory model with the effect of learning and trade credit strategy under a fuzzy environment for the buyer. The buyer’s total profit has been optimized concerning the order quantity in the fuzzy environment where order quantity has been assumed as a decision variable. The results of this model were verified with the help of numerical examples and sensitivity analysis. We compared the buyer’s total profit in a crisp and fuzzy environment and the buyer gained more profit in a fuzzy environment compared to the crisp environment. Moreover, we compared the results with and without the effect of learning and trade credit on the buyer’s ordering policy and obtained a positive effect on the ordering policy in the numerical section. We determined positive results from the sensitivity analysis, which proved that the trade credit policy will be beneficial for both partners of the supply chain.

Keywords

• EOQ
• defective items
• learning effects
• trade credit
• triangular fuzzy number
• fuzzy environment