A single-vendor multi-buyer integrated model with stock- and price-dependent demand under consignment stock policy

A single-vendor multi-buyer integrated model with stock- and price-dependent demand under consignment stock policy

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Article ID: iaor201525261
Volume: 20
Issue: 2
Start Page Number: 228
End Page Number: 245
Publication Date: Feb 2015
Journal: International Journal of Services and Operations Management
Authors: ,
Keywords: inventory, demand, simulation, inventory: order policies
Abstract:

In this paper, we consider a supply chain inventory system consisting of a single vendor and multiple buyers under multiple shipments and consignment stock policy between vendor and buyer. Each buyer's demand is assumed to be dependent on both the selling price and on‐hand stock. Integrated model as well as individual models for vendor and buyers are developed allowing no shortage in inventory. Optimal results are obtained for a numerical example and managerial implications of the principal outcome are discussed. It is observed from the numerical study that the consignment stock policy performs better than the usual shipment policy when the holding cost of the item decreases in the downstream.

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