China Stresses Private,Quality Investment in Northeast Revival Plan

A multibillion-dollar plan to boost Northeast China’s flagging economy will not just use state funds,but also use private capital to invest.The three-year revival plan is not wholly funded by the state and is not a government'blood transfusion',an official with

QUALITY IMPROVEMENT AND PRICING WITH REFERENCE QUALITY EFFECT

This article studies a problem of joint pricing and dynamic product quality investment with consumers＇ reference quality effect under the existence of quality inflation. Optimal control models are constructed to maximize the total profit with a limited quality investment capacity, where the demand is sensitive to historical product quality level. The optimal quality investment strategies for i＇mite and infmite planning horizon are given respectively by solving these optimal control models on the basis of Pontryagin＇s maximum principle, which enables the exact trajectory of the optimal quality investment with the reference quality effect over time to be depicted. In addition, an effective algorithm is designed to generate the optimal joint pricing and dynamic quality investment policy for the system. The main difference between the strategy of finite planning horizon and that of infmite planning horizon is that the latter is a constant. Our study indicates that it is never optimal for firm to increase quality investment all the way throughout the planning horizon. The level of quality investment is higher when taking into account the impact of reference quality. Moreover, numerical example is given to illustrate the validness of the theoretical results. Also, sensitivity analysis is carried out to show how system parameters affect the optimal policies, and some managerial suggestions are presented.

Simultaneous determination of manufacturer’s process mean and production run length,and retailer’s order quantity

In Chen and Liu’s optimum profit model with a traditional production system,they did not consider the effect of product quality on the customer’s demand order quantity,and also ignored the used cost of customers for product.In fact,the customer’s demand quantity is always seriously related to product quality.Hence,in the present paper,we modify Chen and Liu’s model to address the determination of the optimal process parameters by employing the idea of quality loss and single sampling rectifying inspection plan.Assuming that the quality characteristic of the product is normally distributed,Taguchi’s symmetric quadratic quality loss function is applied in evaluating the product quality.Three decision variables,i.e.,the mean of the process characteristic,the production run length of the product and the retailer’s order quantity,are jointly determined in our modified model to maximize the expected total profit of society,which includes both the manufacturer and the retailer.A heuristic solution procedure is developed for this optimization problem,and a numerical example is provided for illustration.From the numerical results,it can be seen that both the sale price per unit and the intercept of the mean demand of the customer are two major(or significant)parameters in the model and should be more accurately estimated in practice.Finally,the quality investment policy is provided to compare its effect on the optimum profit model with quality improvement.

Simultaneous settings of order quantity,wholesale price,production run length,process mean,and warranty period

In this article,the authors propose a modified version of S.L.Chen and Liu’s model with a two-stage production system.Assume that the retailer’s order quantity is concerned with the manufacturer’s selling price and the warranty period of product.The used cost of the customer is measured under the Taguchi’s quadratic quality loss function and concluded in the retailer’s profit function.The quality of the lot for the manufacturer is determined by adopting a two-stage single sampling rectifying inspection plan.The modified economic manufacturing quantity(EMQ)model is addressed in formulating the manufacturer’s expected profit.The retailer’s order quantity,manufacturer’s wholesale price,production run length,process mean,and warranty period of product will be jointly determined by maximizing the total expected profit of the supply chain system including the manufacturer and the retailer.Finally,the quality investment policy is introduced to illustrate the profit improvement for the supply chain system.