The joint determination of process mean, warranty period, replenishment cycle time, and trade credit period under the single-manufacturer single-retailer model

Abstract

Banu and Mondal proposed an integrated inventory model with/without manufacturer’s product warranty and customer’s trade credit. Their model needs to obtain the optimal product warranty, retailer’s cycle length, and customer’s credit period with the maximum of the expected total profit per unit time. Their model can be further applied in the process control. In this paper, the author presents a modified Banu and Mondal’s model with product warranty for obtaining the optimal process mean, warranty period, retailer’s replenishment cycle time, and customer’s trade credit period. Consider that the product quality is normally distributed with unknown process mean, known standard deviation, and larger-the-better characteristic. Numerical example and sensitivity analysis of some parameters will be provided for illustration.

Subject Classification: (2010):

• 60 Probability Theory and Stochastic Processes

Keywords:

• Product warranty
• Replenishment cycle time
• Trade credit period
• Process mean