A single-vendor and a single-buyer integrated inventory model with ordering cost reduction dependent on lead time

M Vijayashree · Ramasamy Uthayakumar

23 citations0/0 files storedJournal of industrial engineering international

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Supply Chain and Inventory Management Quality and Supply Management Sustainable Supply Chain Management

Abstract

Lead time is one of the major limits that affect planning at every stage of the supply chain system. In this paper, we study a continuous review inventory model. This paper investigates the ordering cost reductions are dependent on lead time. This study addressed two-echelon supply chain problem consisting of a single vendor and a single buyer. The main contribution of this study is that the integrated total cost of the single vendor and the single buyer integrated system is analyzed by adopting two different (linear and logarithmic) types ordering cost reductions act dependent on lead time. In both cases, we develop effective solution procedures for finding the optimal solution and then illustrative numerical examples are given to illustrate the results. The solution procedure is to determine the optimal solutions of order quantity, ordering cost, lead time and the number of deliveries from the single vendor and the single buyer in one production run, so that the integrated total cost incurred has the minimum value. Ordering cost reduction is the main aspect of the proposed model. A numerical example is given to validate the model. Numerical example solved by using Matlab software. The mathematical model is solved analytically by minimizing the integrated total cost. Furthermore, the sensitivity analysis is included and the numerical examples are given to illustrate the results. The results obtained in this paper are illustrated with the help of numerical examples. The sensitivity of the proposed model has been checked with respect to the various major parameters of the system. Results reveal that the proposed integrated inventory model is more applicable for the supply chain manufacturing system. For each case, an algorithm procedure of finding the optimal solution is developed. Finally, the graphical representation is presented to illustrate the proposed model and also include the computer flowchart in each model.

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References

1964Analysis of Inventory Systems.2002Designing and Managing the Supply Chain 1993Toyota Production System 1979Decision Systems for Inventory Management and Production Planning 1986A JOINT ECONOMIC‐LOT‐SIZE MODEL FOR PURCHASER AND VENDOR 1977An integrated inventory model for a single supplier-single customer problem 1984The Toyota Production System 1982Principles of inventory and materials management

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2020Sustainable construction supply chain management with the spotlight of inventory optimization under uncertainty 2021Inter-dependent lead-time and ordering cost reduction strategy: a supply chain model with quality control, lead-time dependent backorder and price-sensitive stochastic demand

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