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Single-vendor multi-buyer inventory coordination under private information

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  • Chu, Chi-Leung
  • Leon, V. Jorge

Abstract

This paper considers the problem of coordinating a single-vendor multi-buyer inventory system when there are privacy restrictions in the information required to solve the problem. The objective function and cost parameters of each facility are regarded as private information that no other facilities in the system have access to. Moreover, each facility is responsible to specify its own replenishment policy. The objective is to minimize the total average setup/ordering and inventory-related cost. Solution methodologies under private and global information are developed to find two types of nested power-of-two stationary policies. The first policy assumes all the buyers must replenish simultaneously. The second policy is a more general case where the common replenishment assumption is relaxed. A simple form of information exchange is uncovered that allows the solution methodologies for private and global information yield the same results. The experimental results suggest that the performance of the proposed heuristics is comparable or better than an existing method.

Suggested Citation

  • Chu, Chi-Leung & Leon, V. Jorge, 2008. "Single-vendor multi-buyer inventory coordination under private information," European Journal of Operational Research, Elsevier, vol. 191(2), pages 485-503, December.
  • Handle: RePEc:eee:ejores:v:191:y:2008:i:2:p:485-503
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    Cited by:

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    2. Herbon, Avi, 2021. "An integrated manufacturer-buyer chain with bounded production cycle length," Operations Research Perspectives, Elsevier, vol. 8(C).
    3. Lee, Dong Joo & Jeong, In-Jae, 2010. "A distributed coordination for a single warehouse-multiple retailer problem under private information," International Journal of Production Economics, Elsevier, vol. 125(1), pages 190-199, May.
    4. Lau, Amy Hing Ling & Lau, Hon-Shiang & Wang, Jian-Cai, 2010. "Usefulness of resale price maintenance under different levels of sales-effort cost and system-parameter uncertainties," European Journal of Operational Research, Elsevier, vol. 203(2), pages 513-525, June.
    5. Quijano, Pedro David Guti, 2015. "Decision Support Platform for Urban Freight Transport," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Blecker, Thorsten & Kersten, Wolfgang & Ringle, Christian M. (ed.), Operational Excellence in Logistics and Supply Chains: Optimization Methods, Data-driven Approaches and Security Insights. Proceedings of the Hamburg , volume 22, pages 419-440, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.
    6. Ding, Xiu-Hao & Huang, Rui-Hua, 2010. "Effects of knowledge spillover on inter-organizational resource sharing decision in collaborative knowledge creation," European Journal of Operational Research, Elsevier, vol. 201(3), pages 949-959, March.
    7. Davide Castellano & Mosè Gallo & Liberatina C. Santillo, 2021. "A periodic review policy for a coordinated single vendor-multiple buyers supply chain with controllable lead time and distribution-free approach," 4OR, Springer, vol. 19(3), pages 347-388, September.
    8. Glock, Christoph H. & Kim, Taebok, 2015. "The effect of forward integration on a single-vendor–multi-retailer supply chain under retailer competition," International Journal of Production Economics, Elsevier, vol. 164(C), pages 179-192.

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