Integrated vendor–buyer cooperative inventory models with controllable lead time and ordering cost reduction

Integrated vendor–buyer cooperative inventory models with controllable lead time and ordering cost reduction

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Article ID: iaor200737
Country: Netherlands
Volume: 170
Issue: 2
Start Page Number: 481
End Page Number: 495
Publication Date: Apr 2006
Journal: European Journal of Operational Research
Authors: , , ,
Abstract:

This study deals with the lead time and ordering cost reduction problem in the single-vendor single-buyer integrated inventory model. We consider that buyer lead time can be shortened at an extra crashing cost which depends on the lead time length to be reduced and the ordering lot size. Additionally, buyer ordering cost can be reduced through further investment. Two models are presented in this study. The first model assumes that the ordering cost reduction has no relation to lead time crashing. The second model assumes that the lead time and ordering cost reduction are interacted. An iterative procedure is developed to find the optimal solution and numerical examples are presented to illustrate the results of the proposed models.

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