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An optimal solution technique to the single-vendor multi-buyer integrated inventory supply chain by incorporating some realistic factors

  • Hoque, M.A.
Registered author(s):

    This paper develops two generalized integrated inventory models to deliver a single product from a vendor to multiple buyers. To minimize the total cost of set up, ordering, inventory holding and transportation, the production flow is synchronized by transferring the lot with equal and/or unequal (either all are equal or all are unequal or a combination of equal and unequal) sized batches (sub-lots), each of which incurs a transportation cost. For easy implementation of the models, we relax some unrealistic assumptions in the existing models such as unlimited capacities of the transport equipment and buyers' storage, insignificant set up and transportation times, unlimited lead time and batch sizes. A common optimal solution technique to the models is derived and their performances are analyzed. Potential significances of the solution method are highlighted with solutions of some numerical problems. The importance of the relaxed factors and limitation of the models are discussed.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0377221711004619
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    Article provided by Elsevier in its journal European Journal of Operational Research.

    Volume (Year): 215 (2011)
    Issue (Month): 1 (November)
    Pages: 80-88

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    Handle: RePEc:eee:ejores:v:215:y:2011:i:1:p:80-88
    Contact details of provider: Web page: http://www.elsevier.com/locate/eor

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    16. Boute, Robert N. & Disney, Stephen M. & Lambrecht, Marc R. & Van Houdt, Benny, 2007. "An integrated production and inventory model to dampen upstream demand variability in the supply chain," European Journal of Operational Research, Elsevier, vol. 178(1), pages 121-142, April.
    17. Geng, Wei & Qiu, Minmin & Zhao, Xiaobo, 2010. "An inventory system with single distributor and multiple retailers: Operating scenarios and performance comparison," International Journal of Production Economics, Elsevier, vol. 128(1), pages 434-444, November.
    18. Fernando Bernstein & Fangruo Chen & Awi Federgruen, 2006. "Coordinating Supply Chains with Simple Pricing Schemes: The Role of Vendor-Managed Inventories," Management Science, INFORMS, vol. 52(10), pages 1483-1492, October.
    19. Szendrovits, Andrew Z & Drezner, ZVI, 1980. "Optimizing multi-stage production with constant lot size and varying numbers of batches," Omega, Elsevier, vol. 8(6), pages 623-629.
    20. Mohammad K. El-Najdawi & Paul R. Kleindorfer, 1993. "Common Cycle Lot-Size Scheduling for Multi-Product, Multi-Stage Production," Management Science, INFORMS, vol. 39(7), pages 872-885, July.
    21. Goyal, S. K. & Szendrovits, A. Z., 1986. "A constant lot size model with equal and unequal sized batch shipments between production stages," Engineering Costs and Production Economics, Elsevier, vol. 10(3), pages 203-210, March.
    22. Lode Li & Hongtao Zhang, 2008. "Confidentiality and Information Sharing in Supply Chain Coordination," Management Science, INFORMS, vol. 54(8), pages 1467-1481, August.
    23. Hill, Roger M., 1997. "The single-vendor single-buyer integrated production-inventory model with a generalised policy," European Journal of Operational Research, Elsevier, vol. 97(3), pages 493-499, March.
    24. Almehdawe, Eman & Mantin, Benny, 2010. "Vendor managed inventory with a capacitated manufacturer and multiple retailers: Retailer versus manufacturer leadership," International Journal of Production Economics, Elsevier, vol. 128(1), pages 292-302, November.
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