An optimal solution technique to the single‐vendor multi‐buyer integrated inventory supply chain by incorporating some realistic factors

This paper develops two generalized integrated inventory models to deliver a single product from a vendor to multiple buyers. To minimize the total cost of set up, ordering, inventory holding and transportation, the production flow is synchronized by transferring the lot with equal and/or unequal (either all are equal or all are unequal or a combination of equal and unequal) sized batches (sub‐lots), each of which incurs a transportation cost. For easy implementation of the models, we relax some unrealistic assumptions in the existing models such as unlimited capacities of the transport equipment and buyers’ storage, insignificant set up and transportation times, unlimited lead time and batch sizes. A common optimal solution technique to the models is derived and their performances are analyzed. Potential significances of the solution method are highlighted with solutions of some numerical problems. The importance of the relaxed factors and limitation of the models are discussed.