Title: An extended vendor-buyer integrated inventory model and its minimal cost solution technique

Authors: M.A. Hoque

Addresses: Dept. of Mathematics, FOS, University Brunei Darussalam, Jalan Tungku Link, BE 1410 Darussalam, Brunei

Abstract: This paper extends a single-vendor single-buyer integrated inventory model under controllable lead time with extra safety stock. Recently, a model based on equal and/or unequal sized batch (sub-lot) shipments subject to the constraint of meeting the demand in the lead-time fully was developed. Then a heuristic solution procedure of the model was proposed and cost reductions for two numerical problems were shown. To make the model more realistic, we extend it by restricting the capacities of the transport equipment and buyer|s storage; considering the set up time of the vendor and transportation times of batches and amending several constraints. Then a number of properties that lead to the minimal cost solution to the model are established and the solution method is illustrated with a numerical problem. A comparative study of the methods on some numerical problems is carried out to validate the optimality of the present method.

Keywords: vendor-buyer inventory models; integrated inventory; minimal cost; inventory modelling; lead times; safety stocks.

DOI: 10.1504/IJMMNO.2009.030087

International Journal of Mathematical Modelling and Numerical Optimisation, 2009 Vol.1 No.1/2, pp.56 - 74

Published online: 09 Dec 2009 *

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