Abstract
This study investigated the integrated stochastic inventory problem for a two-stage supply chain consisting of a single retailer and a single supplier. By using batch shipment policy, the expected total cost can be significantly reduced. Equally sized batch shipment models, controlled by both the reorder and the shipping points with sharing information, variable safety factors, are constructed. The problem is solved optimally by the proposed algorithms that determine the economic lot size, the optimal batch sizes, number of batches, and safety factor. A numerical example is included to illustrate the algorithmic procedures and to prove that the model controlled both by the reorder and by the shipping points is superior to the classic model controlled only by the reorder point. Sensitivity analyses are performed to analyze the effect of primary parameters on the lot size, number of batches, safety factor, and expected total cost.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.