The collective impact of breakdowns, quality-surety actions, and adjustable-rate on a hybrid producer–retailer coordinated system

Minimizing the internal supply chains’ operating expenses is a crucial management goal in current transnational enterprises, where manufacturing and retailing often operate independently. Still, managers must periodically evaluate the consolidated operating expenses and performance. The operational goals in the manufacturing units consist of lowering quality- and reliability-relevant costs, avoiding manufacturing delays due to random breakdowns, and meeting order due dates through expediting strategies, such as partial subcontracting and accelerating the fabrication plan. Inspired by efforts to optimize batch runtime for the mentioned intra-supply chains, this study investigates the combined impact of quality-surety actions (including defect removal and rework), correction of breakdowns, multi-delivery, adjustable-rate, and outsourcing on a coordinated producer–retailer system. This study presents a research scheme comprising: (1) model development for the mentioned internal supply-chain features; and (2) optimization approaches for determining the cycle time decision that minimizes the overall system operating expenses. To conclude our work, we validate the research scheme, procedure, and results through numerical demonstration and show that it can effectively support management’s decision-making with various exploratory and crucial information.