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Joint production and delivery lot sizing for a make-to-order producer–buyer supply chain with transportation cost

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  • Lee, Shine-Der
  • Fu, Yen-Chen

Abstract

An integrated production/delivery quantity model in a make-to-order producer–buyer supply chain is analyzed in this paper. The coordinated policy is achieved by scheduling single setup at the producer with multi-delivery to the buyer. We develop two synchronized cost models that include setup cost at the producer, ordering cost at the buyer, inventory carrying cost, and transportation cost that is a fitted power function of delivery quantity, using actual shipping rate data. The mathematical analysis and computational study have demonstrated that significant cost savings can be realized by implementing the proposed approach into the network optimization process.

Suggested Citation

  • Lee, Shine-Der & Fu, Yen-Chen, 2014. "Joint production and delivery lot sizing for a make-to-order producer–buyer supply chain with transportation cost," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 66(C), pages 23-35.
    • Handle: RePEc:eee:transe:v:66:y:2014:i:c:p:23-35
    DOI: 10.1016/j.tre.2014.03.002
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    7. X.J. Wang & S.H. Choi, 2016. "Impacts of carbon emission reduction mechanisms on uncertain make-to-order manufacturing," International Journal of Production Research, Taylor & Francis Journals, vol. 54(11), pages 3311-3328, June.
    8. Heydari, Jafar & Mahmoodi, Mansour & Taleizadeh, Ata Allah, 2016. "Lead time aggregation: A three-echelon supply chain model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 89(C), pages 215-233.

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