This research focuses on quantitatively exploring the impact of using cooperative inventory policies in vendor-buyer systems. Three unique scenarios commonly found in practice are investigated: single-vendor, single-buyer, single product; single-vendor, single-buyer, multiple products; and, multiple-vendor, single-buyer, single product. For each scenario, mathematical programming models are developed that minimize a cost based objective function and include both traditional features such as allowing the buyer to backorder and nontraditional features like having the vendor perform 100% rectifying inspection. Numerical examples are presented to illustrate the usefulness of the models and are used to compare the differences between the cooperative policies and each entity operating independently. |