Abstract
This research develops an integrated single-vendor single-buyer inventory model considering imperfect production process and investment to reduce lead time variance. In the model, we consider a sys...
Highlights
As an integral part of the most businesses and industries, supply chain management has been broadly known as one essential key to company success
Mathematical model formulation This paper develops an integrated inventory model of a single-vendor single-buyer system considering an imperfect production and shortage as full backordering
Inventory model developed in this study considers an imperfect production process resulting in a certain amount of defective items
Summary
As an integral part of the most businesses and industries, supply chain management has been broadly known as one essential key to company success. Several inventory-related costs such as capital cost, investment to reduce setup costs, holding cost at the manufacturer, wholesaler and the retailer can be significantly decreased by a good inventory management (Simchi-Levi, Kaminsky, & Simchi-Levi, 2008) This reality makes us aware that profits of all parties in the supply chain can be increased by improving the inventory management. Since vendor–buyer system expects an increase in their mutual profit at a minimum total cost, they are trying to implement a strategy by coordinating and sharing information to achieve their common goals. Whereas in this case, the vendor acts as a manufacturer while the buyer is the one who buys the product from the vendor and distributes the product to the end customers
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