An optimal policy for a single‐vendor single‐buyer integrated inventory system based on vendor's strategy of shipments to buyer

This paper considers a single‐vendor single‐buyer integrated inventory system subject to the vendor's delivery policy of n shipments to the buyer. The vendor delivers to the buyer as soon as the shipment sized quantity is produced. The optimal solution of the model is obtained by minimising the average total cost of the integrated system. The model is demonstrated with a numerical example. A comparison of the optimal results with those of an existing vendor‐buyer model based on the vendor's different shipment policy under the same modelling framework is made. Sensitivity analysis with respect to some key parameters of the model is also carried out.