Multi-vendor integrated procurement-production system under shared transportation and just-in-time delivery system

Z X Chen and B R Sarker ()
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Z X Chen: Sun Yat-Sen University
B R Sarker: Louisiana State University

Journal of the Operational Research Society, 2010, vol. 61, issue 11, 1654-1666

Abstract: Abstract Just-in-time (JIT) procurement is one of the important elements of lean production system. Successful implementation of JIT needs vendor-manufacturer cooperation on small lot size delivery and inbound logistics cost reduction. Unlike the most recent literature focusing on single-vendor and single-buyer integrated inventory systems, this paper studies a multi-vendor integrated procurement-production inventory system that incorporates delivery and shared transportation costs. A multi-vendor optimal model is developed here for deciding the batch size of vendor's production, and delivery frequencies of different vendors to the manufacturer. Solution procedures for two special cases—uncapacitated and capacitated models are developed; especially, a new approximate method for capacitated model is devised. Numerical examples demonstrate the solution mechanism for the model. The results highlight cooperation between vendors and manufacturers on JIT procurement practices.

Keywords: just-in-time; procurement; inventory; purchasing; lot size; transportation (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (9)

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DOI: 10.1057/jors.2009.115

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