Research On Vendor-Buyer Integrated Production Inventory System

Excellent design, planning and management strategies of supply chain are important for every enterprise. So, more and more enterprises pay attention to the supply chain management(SCM). In the SCM, the enterprises in the neighborhood of supply chain act as vendor and buyer respectively. If the management decisions can't be coordinated among these enterprises, the effectiveness of whole supply chain will receive serious impact. Therefore, How to coordinate the relations among the enterprises is always an important subject. In this paper, we consider the inventory management problem by integrating the links in supply chain-material supplier, vendor and buyer-as one system. We firstly point out the inappropriate assumption in the existing vendor-buyer integrated production inventory models and develop a more general production-inventory model for a single-vendor single-buyer integrated system. Numerical experiments show that the shipment policy this model presents can yield a lower cost solution as compare to the existing ones. Meanwhile, we further generalize the above-mentioned models as follows: First, we discuss the problem for single-vendor multi-buyer integrated system. Second, we consider the case that shortages are allowed to occur and are backordered completely for single-vendor single-buyer integrated system. Third, we consider the problem that the demand for buyer is time varying. At last, we take the raw material ordering into this vendor-buyer integrated production inventory system. The different kinds of models established in our paper have some reference value for management decision of supply chain administrator.