Joint vendor-buyer policy in JIT manufacturing

Joint vendor-buyer policy in JIT manufacturing

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Article ID: iaor19952052
Country: United Kingdom
Volume: 46
Issue: 3
Start Page Number: 375
End Page Number: 385
Publication Date: Mar 1995
Journal: Journal of the Operational Research Society
Authors: , ,
Keywords: inventory: order policies
Abstract:

This study shows that a co-operative batching policy, based on cost information exchange between the vendor and the buyer, can reduce total cost significantly in the just-in-time (JIT) environment. It examines the impact of such co-operation on total costs, including ordering, set-up, transportation and inventory holding costs for a long-term supply relationship. The study shows that joint optimization of both the vendor and the buyer’s operations does not necessarily result in a common lot size. It further examines the sensitivity of the resulting cost savings due to the exchange of cost information to changes in the relevant operating parameters.

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