Global optimal policy for vendor–buyer integrated inventory system within just in time environment

Yang, Po‐Chih; Wee, Hui–Ming; Yang, Hea-Sool

doi:10.1007/s10898-006-9058-4

Cited by 36 publications

(22 citation statements)

References 10 publications

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“…Lin (2009) have considered a buyer-vendor EOQ model with changeable lead-time in supply chain. Yang et al (2007) have developed global optimal policy for vendor-buyer integrated system with just in environment. Viswanathan (1998) have considered optimal strategy for the integrated vendor-buyer inventory model.…”

Section: Literature Reviewmentioning

confidence: 99%

A single-vendor and a single-buyer integrated inventory model with ordering cost reduction dependent on lead time

Vijayashree

Uthayakumar

2017

J Ind Eng Int

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Lead time is one of the major limits that affect planning at every stage of the supply chain system. In this paper, we study a continuous review inventory model. This paper investigates the ordering cost reductions are dependent on lead time. This study addressed two-echelon supply chain problem consisting of a single vendor and a single buyer. The main contribution of this study is that the integrated total cost of the single vendor and the single buyer integrated system is analyzed by adopting two different (linear and logarithmic) types ordering cost reductions act dependent on lead time. In both cases, we develop effective solution procedures for finding the optimal solution and then illustrative numerical examples are given to illustrate the results. The solution procedure is to determine the optimal solutions of order quantity, ordering cost, lead time and the number of deliveries from the single vendor and the single buyer in one production run, so that the integrated total cost incurred has the minimum value. Ordering cost reduction is the main aspect of the proposed model. A numerical example is given to validate the model. Numerical example solved by using Matlab software. The mathematical model is solved analytically by minimizing the integrated total cost. Furthermore, the sensitivity analysis is included and the numerical examples are given to illustrate the results. The results obtained in this paper are illustrated with the help of numerical examples. The sensitivity of the proposed model has been checked with respect to the various major parameters of the system. Results reveal that the proposed integrated inventory model is more applicable for the supply chain manufacturing system. For each case, an algorithm procedure of finding the optimal solution is developed. Finally, the graphical representation is presented to illustrate the proposed model and also include the computer flowchart in each model.

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Section: Literature Reviewmentioning

confidence: 99%

A single-vendor and a single-buyer integrated inventory model with ordering cost reduction dependent on lead time

Vijayashree

Uthayakumar

2017

J Ind Eng Int

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“…The total supply chain cost for scenario i =1,2,3 was of the form , being the unit purchase cost for buyer j for scenario i. Recently, proposed a very similar work to that of Yang and Wee (2006b), where they extended the work of Yang et al (2007) to consider multiple buyers rather than a single buyer. They developed an optimal pricing and replenishment policy in a "leagile" (lean and agile) supply chain system for an integrated vendor-buyers system considering JIT concept and price reduction to the buyers for ordering larger quantity.…”

Section: Multiple Buyersmentioning

confidence: 99%

Quantitative Models for Centralised Supply Chain Coordination

Jaber¹,

Zolfaghari²

2008

Supply Chain

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IntroductionA supply chain is defined as a network of facilities and distribution options that perform the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Managing such functions along the whole chain; that is, from the supplier's supplier to the customer's customer; requires a great deal of coordination among the players in the chain. The effectiveness of coordination in supply chains could be measured in two ways: reduction in total supply chain costs and enhanced coordination services provided to the end customer ⎯ and to all players in the supply chain. Inventory is the highest cost in a supply chain accounting for almost 50% of the total logistics costs. Integrating order quantities models among players in a supply chain is a method of achieving coordination. For coordination to be successful, incentive schemes must be adopted. The literature on supply chain coordination have proposed several incentive schemes for coordination; such as quantity discounts, permissible delay in payments, price discounts, volume discount, common replenishment periods. The available quantitative models in supply chain coordination consider up to four levels (i.e., tier-1 supplier, tier-2 supplier, manufacturer, and buyer), with the majority of studies investigating a two-level supply chain with varying assumptions (e.g., multiple buyers, stochastic demand, imperfect quality, etc). Coordination decisions in supply chains are either centralized or decentralized decision-making processes. A centralized decision making process assumes a unique decision-maker (a team) managing the whole supply chain with an objective to minimize (maximize) the total supply chain cost (profit), whereas a decentralized decision-making process involves multiple decision-makers who have conflicting objectives. This chapter will review the literature for quantitative models for centralised supply chain coordination that emphasize inventory management for the period from 1990 to end of 2007. In this chapter, we will classify the models on the basis of incentive schemes, supply chain levels, and assumptions. This chapter will also provide a map indicative of the limitations of the available studies and steer readers to future directions along this line of research. Centralised supply chain coordinationA typical supply chain consists of multistage business entities where raw materials and components are pushed forward from the supplier's supplier to the customer's customer. During this forward push, value is gradually added at each entity in the supply chain transforming raw materials and components to take their final form as finished products at the customer's end, the buyer. These business entities may be owned by the same organization or by several organizations. Goyal & Gupta (1989) suggested that coordination could be achieved by integrating lotsizing models. However, coordinating orders among players in a supply chain might...

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“…Yang et al [2] developed an integrated vendor-buyer inventory system for deriving optimal policy using the classical differential calculus optimization technique within a just in time (JIT) environment. Numerous algebraic methods, such as the Cauchy-Bunyakovsky-Schwarz (CBS) inequality, the arithmetic-geometric mean inequality (AGM), and so on, were adopted by researchers in the single-stage or multiple-stage inventory model development [3][4][5][6][7][8].…”

Section: Introductionmentioning

confidence: 99%

“…In the inventory model of [2], the integrated two-stage vendor-buyer inventory system contains two decision variables. One is an integer number of n which is the delivery number and the other one is the continuous variable of Q which is the ordering batch size.…”

Section: Introductionmentioning

confidence: 99%

“…However, in these papers, the cost comparisons method and arithmetic-geometric mean inequality do not focus on explicitly developing the mathematical expressions for two-stage inventory system with the backorders. In this study, we extend the inventory model proposed by Yang et al (2007) [2], and consider a three-variable inventory problem and present an alternative approach to determine the optimal replenishment policy for the integrated vendor-buyer inventory system with backordering utilizing the cost-difference rate comparison approach. …”

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confidence: 99%

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An easy method to derive the integrated vendor–buyer production–inventory model with backordering using cost-difference rate comparison approach

Chung

2013

Mathematical and Computer Modelling

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a b s t r a c tIn growing competitive markets, close cooperative strategies among the vendors and the buyers are essential to cut the joint inventory cost and to have less response time to the supply chain players. Recently, Yang et al. (2007) [2] have presented an integrated twostage production-inventory model and used the classical differential calculus method to derive the optimal lot size for the vendor and the buyer, and the number of deliveries in supply chain. Moreover, numerous researchers adopted other algebraic methods to derive the optimal solution for inventory models. However, in these papers, the cost comparisons method and arithmetic-geometric mean inequality do not focus on explicitly developing the mathematical expressions for two-stage inventory system with the backorders. In this study, we extend the inventory model proposed by Yang et al. (2007) [2], and consider a three-variable inventory problem and present an alternative approach to determine the optimal replenishment policy for the integrated vendor-buyer inventory system with backordering utilizing the cost-difference rate comparison approach.

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Global optimal policy for vendor–buyer integrated inventory system within just in time environment

Cited by 36 publications

References 10 publications

A single-vendor and a single-buyer integrated inventory model with ordering cost reduction dependent on lead time

A single-vendor and a single-buyer integrated inventory model with ordering cost reduction dependent on lead time

Quantitative Models for Centralised Supply Chain Coordination

An easy method to derive the integrated vendor–buyer production–inventory model with backordering using cost-difference rate comparison approach

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