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Joint economic lot size (JELS) model for single-vendor single-buyer with variable production rate and partial backorder

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  • Wakhid Ahmad Jauhari
  • I. Nyoman Pujawan

Abstract

This paper presents joint economic lot size (JELS) models under stochastic demand for single-vendor single-buyer system by synchronising ordering, production and raw material procurement cycles. We consider variable production rate and partial backorder in the proposed model. An iterative procedure is employed to determine simultaneously safety factor, delivery lot size, delivery frequency, production batch, raw material lot size and production rate for minimising total cost. We investigate the behaviour of the model with the use of numerical analysis. Our study indicates that considering variable production rate in the model results in lower total cost compared to the case where the production rate is assumed to be fixed. Our study also shows that the increase in demand uncertainty leads to higher total costs, but the buyer absorbed most of the increase. In addition, we also show that the minimum total cost is obtained when the shortages are fully, rather than partially, backordered.

Suggested Citation

  • Wakhid Ahmad Jauhari & I. Nyoman Pujawan, 2014. "Joint economic lot size (JELS) model for single-vendor single-buyer with variable production rate and partial backorder," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 20(1), pages 91-108.
    • Handle: RePEc:ids:ijores:v:20:y:2014:i:1:p:91-108
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    Citations

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    Cited by:

    1. Herbon, Avi, 2020. "An approximated solution to the constrained integrated manufacturer-buyer supply problem," Operations Research Perspectives, Elsevier, vol. 7(C).
    2. Dharamender Singh & Anurag Jayswal & Majed G. Alharbi & Ali Akbar Shaikh, 2021. "An Investigation of a Supply Chain Model for Co-Ordination of Finished Products and Raw Materials in a Production System under Different Situations," Sustainability, MDPI, vol. 13(22), pages 1-25, November.
    3. Glock, Christoph H. & Grosse, Eric H., 2021. "The impact of controllable production rates on the performance of inventory systems: A systematic review of the literature," European Journal of Operational Research, Elsevier, vol. 288(3), pages 703-720.
    4. Davide Castellano & Mosè Gallo & Liberatina C. Santillo, 2021. "A periodic review policy for a coordinated single vendor-multiple buyers supply chain with controllable lead time and distribution-free approach," 4OR, Springer, vol. 19(3), pages 347-388, September.
    5. Herbon, Avi & David, Israel, 2023. "Optimal manufacturer's cost sharing ratio, shipping policy and production rate – A two-echelon supply chain," Operations Research Perspectives, Elsevier, vol. 10(C).
    6. Wakhid Ahmad Jauhari & I Nyoman Pujawan & Mokh Suef, 2023. "Sustainable inventory management with hybrid production system and investment to reduce defects," Annals of Operations Research, Springer, vol. 324(1), pages 543-572, May.

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