An alternative model for integrated vendor–buyer inventory under controllable lead time and its heuristic solution

Abstract

Researchers have given a lot of attention to the integrated vendor–buyer problem. Both deterministic and stochastic models on the subject are available in the literature. Most of the models have appeared with the need and requirement of a Just-in-Time (JIT) system environment. The close tie between a vendor and a buyer helps to deliver products in a shorter lead time with reduced inventory cost. Based on this idea, recently, some researchers have presented such a stochastic model with equal sized batch (part of a lot) transfer under controllable lead time. They have shown that their model provides a lower total cost for a numerical problem. To enrich the JIT system literature, considering transportation cost of a batch, this article develops an alternative model of the problem with equal or unequal sized batches transfer under controllable lead time. Then it develops a heuristic solution technique of the model and applying it solves the same numerical example to show a reasonable cost reduction.

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