A collaborating inventory model in a supply chain

The present article investigates an economic order quantity/economic production quantity model in three-layer (manufacturer, vendor and retailer) supply chain management. In each stage, the products may undergo non-conforming quality items which have less value in the market. This model maximizes a collaborating expected profit function while production rate, order quantity, number of shipments with equal sizes are decision variables and unit production cost is a function of production rate. Numerical example is illustrated to test the model. (C) 2012 Elsevier B.V. All rights reserved.