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Single-vendor single-buyer inventory model with discrete delivery order, random machine unavailability time and lost sales

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  • Wee, Hui Ming
  • Widyadana, Gede Agus

Abstract

Integrated single-vendor single-buyer inventory model with multiple deliveries has proved to result in less inventory cost. However, many researchers assumed that the production run is perfect and there is no production delay. In reality, production delay is prevalent due to random machine unavailability and shortages. This study considers lost sales, and two kinds of machine unavailability distributions—uniformly and exponentially distributed. A classical optimization technique is used to derive an optimal solution and a numerical example is provided to illustrate the theory. The results show that delivery frequency has significant effect on the optimal total cost, and a higher lost sales cost will result in a higher delivery frequency.

Suggested Citation

  • Wee, Hui Ming & Widyadana, Gede Agus, 2013. "Single-vendor single-buyer inventory model with discrete delivery order, random machine unavailability time and lost sales," International Journal of Production Economics, Elsevier, vol. 143(2), pages 574-579.
    • Handle: RePEc:eee:proeco:v:143:y:2013:i:2:p:574-579
    DOI: 10.1016/j.ijpe.2011.11.019
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    2. Amir Hossein Nobil & Amir Hosein Afshar Sedigh & Leopoldo Eduardo Cárdenas-Barrón, 2020. "A multiproduct single machine economic production quantity (EPQ) inventory model with discrete delivery order, joint production policy and budget constraints," Annals of Operations Research, Springer, vol. 286(1), pages 265-301, March.
    3. S. Sarkar & B. C. Giri, 2020. "A vendor–buyer integrated inventory system with variable lead time and uncertain market demand," Operational Research, Springer, vol. 20(1), pages 491-515, March.
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    6. AlDurgam, Mohammad & Adegbola, Kehinde & Glock, Christoph H., 2017. "A single-vendor single-manufacturer integrated inventory model with stochastic demand and variable production rate," International Journal of Production Economics, Elsevier, vol. 191(C), pages 335-350.

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