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: | Kim Chang Hyun |
Keywords: | supply & supply chains |
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.