Advances in Decision Sciences
Volume 2012 (2012), Article ID 359082, 14 pages
http://dx.doi.org/10.1155/2012/359082
Research Article

Economic Design of Acceptance Sampling Plans in a Two-Stage Supply Chain

Lie-Fern Hsu1 and Jia-Tzer Hsu2

1Department of Management, Zicklin School of Business, Baruch College, The City University of New York, One Bernard Baruch Way, P.O. Box B9-240, New York, NY 10010, USA
2Department of Computer Science and Information Engineering, Hungkuang University, Shalu, Taichung 43302, Taiwan

Received 2 August 2011; Revised 13 January 2012; Accepted 19 January 2012

Academic Editor: Henry Schellhorn

Copyright © 2012 Lie-Fern Hsu and Jia-Tzer Hsu. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Supply Chain Management, which is concerned with material and information flows between facilities and the final customers, has been considered the most popular operations strategy for improving organizational competitiveness nowadays. With the advanced development of computer technology, it is getting easier to derive an acceptance sampling plan satisfying both the producer's and consumer's quality and risk requirements. However, all the available QC tables and computer software determine the sampling plan on a noneconomic basis. In this paper, we design an economic model to determine the optimal sampling plan in a two-stage supply chain that minimizes the producer's and the consumer's total quality cost while satisfying both the producer's and consumer's quality and risk requirements. Numerical examples show that the optimal sampling plan is quite sensitive to the producer's product quality. The product's inspection, internal failure, and postsale failure costs also have an effect on the optimal sampling plan.