Production and shipment lot sizing in a vendor-buyer supply chain with freight cost discounts

Production and shipment lot sizing in a vendor-buyer supply chain with freight cost discounts

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Article ID: iaor20103045
Volume: 34
Issue: 4
Start Page Number: 541
End Page Number: 550
Publication Date: Jun 2009
Journal: Journal of the Korean O.R. and MS Society
Authors:
Keywords: supply & supply chains
Abstract:

Based on single-vendor single-buyer integrated production-inventory problem, a model considering freight costs discounts is suggested when the cargo capacity is constrained. With the cost function formulated, several properties of the model are derived and analyzed. An efficient algorithm to find solutions such as shipment lot size, number of shipments and number of full truckloads using properties derived is suggested. Numerical results are provided to illustrate the proposed solution procedures and to provide additional insights.

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