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Solving a vendor–buyer integrated problem with rework and a specific multi-delivery policy by a two-phase algebraic approach

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Listed:
  • Tseng, Chao-Tang
  • Wu, Mei-Fang
  • Lin, Hong-Dar
  • Chiu, Yuan-Shyi Peter

Abstract

This paper is concerned with solving a vendor–buyer integrated inventory problem with rework and a specific multi-delivery policy by a two-phase algebraic approach. Conventional method to the problem is to use differential calculus and Hessian matrix equations to prove convexity of system cost function first before determining the optimal production–shipment policy for such a vendor–buyer integrated system (Chiu et al., 2013b). This study presents an alternative two-phase algebraic approach to derive the same optimal policy. The proposed straightforward algebraic derivations can assist practitioners who may not have sufficient knowledge of calculus in understanding with ease such a real life vendor–buyer integrated system.

Suggested Citation

  • Tseng, Chao-Tang & Wu, Mei-Fang & Lin, Hong-Dar & Chiu, Yuan-Shyi Peter, 2014. "Solving a vendor–buyer integrated problem with rework and a specific multi-delivery policy by a two-phase algebraic approach," Economic Modelling, Elsevier, vol. 36(C), pages 30-36.
    • Handle: RePEc:eee:ecmode:v:36:y:2014:i:c:p:30-36
    DOI: 10.1016/j.econmod.2013.09.013
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    References listed on IDEAS

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    More about this item

    Keywords

    Vendor–buyer system; Production–shipment policy; Optimization; Production lot-size; Multiple deliveries; Algebraic approach;
    All these keywords.

    JEL classification:

    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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