Effects of overtime and trade credit on an integrated inventory model with limited production capacity
研究了有限产能下，供应商通过加班和外包策略应对需求，并给予买家贸易信贷的供应链模型，旨在确定最优订货量、加班和外包策略以最小化成本。
In production and operation activities, some enterprises’ capacity can not make up for market demand. To meet customer needs, overtime is one of the most common measures taken by enterprises. In this restricted situation, a combination strategy of overtime and subcontracting is introduced to improve the production. When orders occur, the vendor offers a credit time to the buyer, and it is assumed that daily demand is an exponential function of credit time. In this paper, a two-echelon supply chain with overtime and subcontracting under a trade credit policy is studied when limited production capacity exists. The main objective of this paper is to determine the buyer’s optimal ordering quantity and the vendor’s optimal overtime and subcontracting strategies with an optimal credit period, which minimize the costs of an independent decision model and an integrated model, respectively. Adequate numerical examples and sensitivity analysis are presented to demonstrate the applicability of the proposed framework. The conclusions show that inefficient overtime satisfies low demand under limited production capacity and that the vendor turns to subcontractors when demand grows.