Article ID: | iaor20032749 |
Country: | Netherlands |
Volume: | 81/82 |
Start Page Number: | 431 |
End Page Number: | 441 |
Publication Date: | Jan 2003 |
Journal: | International Journal of Production Economics |
Authors: | Kelle Peter, Miller Pam Anders, Al-khateeb Faisal |
Several studies have focused on the qualitative aspects of establishing and negotiating buyer–supplier partnerships, including Just-In-Time (JIT) supply, but few quantitative models and investigations are available in this area. We explore the two typical cases: supplier's dominance, with large production lot sizes and shipment sizes and buyer's dominance with small, frequent shipments. In each case, we compare the optimal shipment policy of the dominant party to the joint optimal policy. The savings or loss for each party and the total system cost improvements are computed which provide the quantitative support for negotiation, compromise, and compensation. We extend the quantitative results for different JIT scenarios. We assume that the buyer's order is delivered in