Abstract
This paper deals with the problem of transportation and quality within a Just-in-Time (JIT) inventory replenishment system. Formerly, transportation and quality problem are often modelled separately in most integrated inventory lot-sizing models. Hence, this paper develops an integrated vendor-buyer lot-sizing model by considering transportation and quality improvements into a JIT environment. The model is developed for minimising a total vendor–buyer system cost by optimising decisions such as delivery quantity, production batch, number of shipments, and process quality. Numerical examples and sensitivity analysis are provided to illustrate the proposed model. The developed model was also compared with an enumeration method to analyse the effectiveness of the proposed model to find the optimum solution. The results emphasise that the proposed model contributes to a new approach and obtains a near optimum solution for inventory replenishment decisions. The results are also beneficial to JIT practices as the model can improve the transport payload and reduce the chance of defective products and improving quality-related costs.
Highlights
The application of the Just-in-Time (JIT) purchasing system has a tremendous effect on helping eliminate waste through various issues such as consistency in improving quality and minimising inventory costs by frequent deliveries in small quantities
One case was used to analyse the proposed model to derive an optimal solution for the inventory replenishment by considering the transportation and quality improvement
The delivery quantity based on the Full Truck Load (FTL) shipment is larger than the Less-than-Truck Load (LTL) shipment
Summary
The application of the Just-in-Time (JIT) purchasing system has a tremendous effect on helping eliminate waste through various issues such as consistency in improving quality and minimising inventory costs by frequent deliveries in small quantities. The buyers are left to decide how much they requires and when they need it, so this purchasing process may lead to an increased cost to the vendors as they have lost control [2,3]. To deal with this problem, Goyal [4] proposed a vendor-buyer integrated model as opposed to a buyer’s independent decision in inventory replenishment. There must be understanding and trustworthy collaboration between the members of the chain to achieve an integrated supply chain
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