Some studies on integrated multistage production-inventory systems

Traditional economic lot size models deal with the production and purchasing systems separately. However, optimizing these sub-systems singly may not result in the overall optimal performance. By integrating the production and purchasing problems, the degree of suboptimality is being reduced. Integrated Production-Inventory (IPI) models deal with the union between the production and purchasing sub-systems when raw materials are used in the production. In this paper, an attempt is made to compare the cost deviations between the independent EOQ and EBQ approaches and IPI approach.