Title: An optimal policy for an integrated vendor-buyer model with two warehouses under vendor's capacity constraint

Authors: Rupak Bhattacharjee; Bibhas C. Giri; Ayan Chakraborty

Addresses: Department of Mathematics, JIS College of Engineering, Kalyani-741235, India ' Department of Mathematics, Jadavpur University, Kolkata-700032, India ' Department of Mathematics, National Defence Academy, Pune-411023, India

Abstract: The paper considers an integrated single-vendor single-buyer supply chain model in which the vendor is assumed to be capacity constrained. The vendor can keep the excess units beyond the capacity of its own warehouse (OW) in a rented warehouse (RW) whose holding cost is higher than that of the own warehouse. The vendor delivers the buyer's order quantity in a number of equal shipments. The proposed integrated model is formulated and some of its characteristics are studied analytically. Considering the vendor's capacity as a control variable, the optimal decisions of the model are obtained for a numerical example. Sensitivity analysis is also carried out to measure the impact of key model-parameters on the outcome of the model.

Keywords: supply chain; vendor-buyer integrated model; rented warehouse; capacity constraint.

DOI: 10.1504/IJIR.2018.092348

International Journal of Inventory Research, 2018 Vol.5 No.1, pp.13 - 28

Received: 20 Mar 2017
Accepted: 18 Apr 2017
Published online: 16 Jun 2018 *