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

Abstract

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

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