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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. [ABSTRACT FROM AUTHOR]

In this paper, we consider an integrated production-delivery model in which a vendor supplies the same product to multiple buyers. Unlike existing study, in this proposed model, we assume that the sum of all buyers' demand rates is larger than the vendor's production rate under normal work, but less than that under overtime. All buyers are independent of each other. For each buyer, the lead time demand is stochastic and the shortage during lead time is permitted. The main objective of this model is to determine the optimal production and delivery policies and the optimal overtime strategy, which minimize the joint expected annual cost of the system. Based on the genetic algorithm, we develop a solution procedure to find the optimal production, delivery, and overtime decision of this model. Computational experiments show the error rate between the objective values obtained by the proposed solution procedure and the solutions solved by the exhaustive method. The results indicate that the proposed mixed genetic algorithm is more effective and adoptable in comparison with the exhaustive method as it can be able to calculate the optimal solutions for at least 96% for the instances. Ultimately, an adequate numerical example is given to show the detailed process of the solution procedure, and sensitivity analysis of main parameters with managerial implication is discussed. [ABSTRACT FROM AUTHOR]

An extension of the integrated production-delivery lot sizing model with limited production capacity and transportation cost is investigated. We introduce the factor of overtime work into the model to improve the manufacturer’s production. In addition, when finishing a lot, the manufacturer has maintenance time to maintain and repair equipment for ensuring that the supply chain is operating continuously. By analyzing the integrated model, the solution procedure is provided to determine the optimal delivery and order policy. We conduct a numerical experiment and give sensitive analysis by varying some parameters to illustrate the problem and its solution procedure. [ABSTRACT FROM AUTHOR]