On improving an integrated inventory model for a single vendor and multiple buyers with a relaxed material ordering cycle policy

Yugang Yu (1) , Feng Chu (2) , Haoxun Chen (2)

1 Erasmus University Rotterdam
2 LOSI - Laboratoire d'Optimisation des Systèmes Industriels

In this paper, we propose a new model for improving the lot size obtained with the model of Woo, Hsu, and Wu (2001) proposed in their paper “An integrated inventory model for a single vendor and multiple buyers with ordering cost reduction” (Int. J. Production Economics 73 203–215). The new model can provide a lower or equal joint total cost as compared to Woo, Hsu, and Wu’s model due to the relaxation of their integral multiple material ordering cycle policy to a fractional-integral multiple material ordering cycle policy. The proposed model is analyzed and an algorithm for calculating the optimal lot size of the model is developed. A numerical study based on the example used by Woo, Hsu, and Wu is presented.

Keywords: Inventory; integrated model; raw materials; single vendor; multiple buyers

Domains: Operations Research [cs.RO]

Yugang Yu, Feng Chu, Haoxun Chen. On improving an integrated inventory model for a single vendor and multiple buyers with a relaxed material ordering cycle policy. Journal of Systems Science and Systems Engineering, 2006, 15 (3), pp.298-313. ⟨10.1007/s11518-006-5014-6⟩. ⟨hal-02499518⟩