Integrated vendor-buyer cooperative inventory models with variant permissible delay in payments.

*(English)*Zbl 1180.90008Summary: The integrated inventory models usually have the advantage of reducing total cost. However, the way to allocate the cost savings from the integration to the buyer and vendor is critical to the success of the joint relationship between both sides. To deal with this problem, this paper develops integrated models with permissible delay in payments for determining the optimal replenishment time interval and replenishment frequency. Applying the models and considering the coefficient of negotiation and the maximum delay payment period, a simple solution algorithm is presented to resolve the allocation of cost savings in the integration model. The coefficient of negotiation is adopted to determine the compromise between the buyer’s and vendor’s cost savings. A numerical example is used to demonstrate the feasibility of the proposed integration models. A sensitivity analysis is also conducted to demonstrate some properties. Using the information from the proposed models, the buyer and vendor can achieve an acceptable compromise solution for both sides in the supply chain management.

##### MSC:

90B05 | Inventory, storage, reservoirs |

PDF
BibTeX
XML
Cite

\textit{L.-H. Chen} and \textit{F.-S. Kang}, Eur. J. Oper. Res. 183, No. 2, 658--673 (2007; Zbl 1180.90008)

Full Text:
DOI

##### References:

[1] | Abad, P.L.; Jaggi, C.K., A joint approach for setting unit price and the length of the credit period for seller when end demand is price sensitive, International journal of production economics, 83, 115-122, (2003) |

[2] | Aggarwal, S.P.; Jaggi, C.K., Ordering policies of deteriorating items under permissible delay in payments, Journal of the operational research society, 46, 658-662, (1995) · Zbl 0830.90032 |

[3] | Banerjee, A., A joint economic-lot-size model for purchaser and vendor, Decision sciences, 17, 292-311, (1986) |

[4] | Chakravarty, A.K.; Martin, G.E., An optimal joint buyer – seller discount pricing model, Computers and operations research, 15, 271-281, (1998) |

[5] | Chang, H.C.; Ouyang, L.Y.; Wu, K.S.; Ho, C.H., Integrated vendor – buyer cooperative inventory models with controllable lead time and ordering cost reduction, European journal of operational research, 170, 481-495, (2006) · Zbl 1085.90002 |

[6] | Chu, P.; Chung, K.J.; Lan, S.P., Economic order quantity of deteriorating items under permissible delay in payments, Computers and operations research, 25, 817-824, (1998) · Zbl 1042.90505 |

[7] | Chung, K.J., A theorem on the determination of economics order quantity under conditions of permissible delay in payments, Computers and operations research, 25, 49-52, (1998) · Zbl 0906.90051 |

[8] | Goyal, S.K., An integrated inventory model for a single supplier-single customer problem, International journal of production research, 15, 1, 107-111, (1976) |

[9] | Goyal, S.K., Economic order quantity under conditions of permissible delay in payments, Journal of the operational research society, 36, 335-338, (1985) · Zbl 0568.90025 |

[10] | Goyal, S.K., A joint economic-lot-size model for purchaser and vendor: A comment, Decision sciences, 19, 236-241, (1988) |

[11] | Ha, D.; Kim, S.L., Implementation of JIT purchasing: an integrated approach, Production planning and control, 8, 152-157, (1997) |

[12] | Joglekar, P.N., Comment on a quantity discount pricing model to increase vendor profits, Management science, 34, 1391-1398, (1988) |

[13] | Li, S.X., Managing buyer – seller system cooperation with quantity discount considerations, Computers and operations research, 22, 947-958, (1995) · Zbl 0854.90055 |

[14] | Li, S.X.; Huang, Z.; Ashley, A., Seller – buyer system co-operation in a monopolistic market, Journal of the operational research society, 46, 1456-1470, (1995) · Zbl 0843.90033 |

[15] | Li, S.X.; Huang, Z.; Ashley, A., Inventory, channel coordination and bargaining in a manufacturer-retailer system, Annals of operations research, 68, 47-60, (1996) · Zbl 0867.90064 |

[16] | Ouyang, L.Y.; Wu, K.S.; Ho, C.H., Integrated vendor – buyer cooperative models with stochastic demand in controllable lead time, International journal of production economics, 92, 255-266, (2004) |

[17] | Pan, J.C.-H.; Yang, J.S., A study of an integrated inventory with controllable lead time, International journal of production research, 40, 1263-1273, (2002) · Zbl 1027.90024 |

[18] | Teng, J.T., On the economic order quantity under conditions of permissible delay in payments, Journal of the operational research society, 53, 915-918, (2002) · Zbl 1098.90006 |

[19] | Yang, P.C., Pricing strategy for deteriorating items using quantity discount when demand is price sensitive, European journal of operational research, 157, 389-397, (2004) · Zbl 1103.90313 |

[20] | Yang, P.C.; Wee, H.M., Optimal strategy in vendor – buyer alliances with quantity discount, International journal of computer integrated manufacturing, 16, 455-463, (2003) |

This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. It attempts to reflect the references listed in the original paper as accurately as possible without claiming the completeness or perfect precision of the matching.