An alternative model for integrated vendor–buyer inventory under controllable lead time and its heuristic solution

Abstract

Researchers have given a lot of attention to the integrated vendor-buyer problem. Both deterministic and stochastic models on the subject are available in the literature. Most of the models have appeared with the need and requirement of a Just-in-Time (JIT) system environment. The close tie between a vendor and a buyer helps to deliver products in a shorter lead time with reduced inventory cost. Based on this idea, recently, some researchers have presented such a stochastic model with equal sized batch (part of a lot) transfer under controllable lead time. They have shown that their model provides a lower total cost for a numerical problem. To enrich the JIT system literature, considering transportation cost of a batch, this article develops an alternative model of the problem with equal or unequal sized batches transfer under controllable lead time. Then it develops a heuristic solution technique of the model and applying it solves the same numerical example to show a reasonable cost reduction.

Sustainable Decision-Making Approach for Dual-Channel Manufacturing Systems under Space Constraints

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Optimal Inventory Strategies for Pharmaceutical Products Incorporating Carbon Emissions

“…Liao & Shyu [8] devised a probabilistic inventory model in which lead time was considered as a decision variable. Several researchers extended this approach in integrated inventory models for lead time reduction (see [9][10][11][12][13][14]). Glock [13] studied alternative methods for controlling lead time and their impact on the safety stock and the expected total costs of a continuous review inventory control system.…”

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“…Chang et al (2006) extended their model by taking the crashing of ordering cost for the buyer, where lead time and ordering cost are linearly dependent. There are also some integrated inventory model involving variable lead time with quality improvement (Yang & Pan, 2004;Ouyang et al, 2002;Ouyang et al, 2007;Hoque, 2007;Nasri, 1990). Unfortunately, none of them considered the reduction of setup cost for the vendor which helps speed up the production process/delivery of the orders.…”