A single-vendor single-buyer joint economic lot size model subject to budget constraints

Abstract

In current competitive business environment, firms have realized that integrated scheduling and managing their supply chain through its different levels is substantial. On the other hand, the supply chain parties act under some restrictions, and ignoring these limitations results in infeasible solutions in many real-world case studies. The purpose of this paper is to present a joint economic lot size (JELS) model, which considers the buyer's and the vendor's budget limitations to achieve a more reliable model solution. The idea is to present an extension of the model originally proposed by Ben-Daya et al. (Eur J Oper Res 185:726–742, 14). In addition, a solution algorithm is presented to make the solution procedure of proposed constrained model less complex. Numerical analysis is conducted to show the effect of applying the budget constraints.