OPTIMAL REPLENISHMENT POLICY FOR AN INTEGRATED SUPPLIER–BUYER DETERIORATING INVENTORY MODEL CONSIDERING MULTIPLE JIT DELIVERY AND OTHER COST FUNCTIONS

Chun-Jen Chung and Hui-Ming Wee ()
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Chun-Jen Chung: Department of Industrial Engineering, Chung Yuan Christian University, Chungli 32023, Taiwan, ROC
Hui-Ming Wee: Department of Industrial Engineering, Chung Yuan Christian University, Chungli 32023, Taiwan, ROC

Asia-Pacific Journal of Operational Research (APJOR), 2007, vol. 24, issue 01, 125-145

Abstract: This study develops an integrated deteriorating inventory policy for a single-buyer–single-supplier model with multiple JIT deliveries considering the transportation cost, inspection cost and the cost of less flexibility. Distinct from the former concept of average inventory level, our paper proposes a significantly different approach to deal with the first production batch and uses a revised method to approximate the relationship between the supplier's production time and the storage time. We provide a rigorous analysis to derive the number of inspection and deliveries, the optimal cycle time of deliveries, and the delivery size for the replenishment policy of the integrated buyer–supplier inventory deteriorating model. It is shown that the unit inspection cost is one of the critical factors affecting the deteriorating inventory model. A numerical example is presented to illustrate the theory.

Keywords: Integrated deteriorating model; JIT delivery; production and inventory; flexibility; inspection (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S0217595907001127

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