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An integrated inventory model for vendor-customer coordination in a supply chain

Author

Listed:
  • D.K. Shaw
  • A. Mishra
  • D.A. Khan

Abstract

The present study focuses on determining economic ordering quantity (EOQ) and shipping strategy of an inventory system integrated with a single-product, single-vendor and multi-customer scenario. Depending on the demand of all customers, production and shipping policies are determined and present a suitable model to illustrate the transferring of equally-sized batches. Optimum values of the decision variables are determined using a direct search method. In order to justify the lot-splitting approach for solving the integrated inventory problem, alternative model with no lot splitting are devised and tested under the same circumstances which produce similar or better results. A numerical example and related sensitivity analysis are given to show the effectiveness of the proposed model.

Suggested Citation

  • D.K. Shaw & A. Mishra & D.A. Khan, 2011. "An integrated inventory model for vendor-customer coordination in a supply chain," International Journal of Business Performance and Supply Chain Modelling, Inderscience Enterprises Ltd, vol. 3(2), pages 181-194.
    • Handle: RePEc:ids:ijbpsc:v:3:y:2011:i:2:p:181-194
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