An integrated equal-lots policy for shipping a vendor's final production batch to a single buyer under linearly decreasing demand

Mohd Omar

International Journal of Production Economics, 2009, vol. 118, issue 1, 185-188

Abstract: This paper considers a supply chain in which a vendor supplies a product to a buyer. The vendor is about to manufacture the final batch of the product at a finite rate and then periodically ship the output to the buyer. The buyer then consumes the product at a linearly decreasing demand rate. Most previous work on this topic has been based on the assumption of fixed demand rate. Costs are attached to the manufacturing batch set-up, the delivery of a shipment, and stockholding at the vendor and buyer. The objective is to determine the number of shipments and sizes of those shipments which minimise the total cost--assuming the vendor and buyer collaborate and find a way of sharing the consequent benefits. We show how the optimal policy may be derived when the shipments size are identical. We illustrate this policy with numerical examples.

Keywords: Production; Inventory; Single; vendor; Single; buyer; Linearly; decreasing; demand (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:118:y:2009:i:1:p:185-188

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