Title: A consolidated delivery policy of multiple suppliers for a single buyer

Authors: Taebok Kim, Suresh Kumar Goyal

Addresses: Graduate School of Logistics, University of Incheon, Yeonsu-Gu, Incheon, Korea. ' John Molson School of Business, Concordia University, 1455, Demaisonneuve Blvd. West, Montreal, H3G 1M8, Canada

Abstract: The development of a well-structured supply chain should simultaneously take into account both inventory-related costs and transportation costs to minimise the overall operating cost. A buyer|s lot-sizing decision affects all suppliers| inventory and transportation costs as well as its own operating cost. First of all, it is valuable to perform a structured analysis dealing with the conflicts between a buyer and a group of suppliers. Secondly, the coordination issue among the suppliers should be dealt with. The purpose of this study is to investigate how the transportation cost affects the joint lot-sizing policy in a multiple-supplier-single-buyer supply chain. In this study, it is assumed that the transportation cost is proportional to the fleet size utilised to deliver the buyer|s requested order quantity. We first model the joint decision-making problem, develop the solution procedure and then finally propose the profit-sharing mechanism.

Keywords: single buyer; multiple suppliers; lumpy deliveries; phased deliveries; supply chain management; SCM; consolidated delivery policy; lot sizing policy; transportation costs; fleet size; profit sharing.

DOI: 10.1504/IJPM.2009.024811

International Journal of Procurement Management, 2009 Vol.2 No.3, pp.267 - 287

Published online: 01 May 2009 *

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