Inventory management and behavioral analysis for cooperative purchase

In this paper, we wonder whether inventory management for cooperative purchase among retailers is more beneficial than that for individual retailers. The inventory model for individual retailer is well known and is also presented. To analyze cost-saving, we formulate an inventory model for cooperative purchase, which may be reviewed periodically for efficient cooperative purchase. Thus, to minimize the annual inventory total cost, the triple decision variables of the common period time, T, the integer number of T, Mi and the order up to level, Si for retailer i will be determined jointly. In addition, we develop a solution procedure to find the optimal decision variables. We analyze cost savings by computing the total cost, from the models as well as the characteristics of each retailer's behavior, according to the relevant inventory parameters.