IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v66y2014icp23-35.html
   My bibliography  Save this article

Joint production and delivery lot sizing for a make-to-order producer–buyer supply chain with transportation cost

Author

Listed:
  • Lee, Shine-Der
  • Fu, Yen-Chen

Abstract

An integrated production/delivery quantity model in a make-to-order producer–buyer supply chain is analyzed in this paper. The coordinated policy is achieved by scheduling single setup at the producer with multi-delivery to the buyer. We develop two synchronized cost models that include setup cost at the producer, ordering cost at the buyer, inventory carrying cost, and transportation cost that is a fitted power function of delivery quantity, using actual shipping rate data. The mathematical analysis and computational study have demonstrated that significant cost savings can be realized by implementing the proposed approach into the network optimization process.

Suggested Citation

  • Lee, Shine-Der & Fu, Yen-Chen, 2014. "Joint production and delivery lot sizing for a make-to-order producer–buyer supply chain with transportation cost," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 66(C), pages 23-35.
    • Handle: RePEc:eee:transe:v:66:y:2014:i:c:p:23-35
    DOI: 10.1016/j.tre.2014.03.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554514000295
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tre.2014.03.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Leroy B. Schwarz & Linus Schrage, 1978. "Note--On Echelon Holding Costs," Management Science, INFORMS, vol. 24(8), pages 865-866, April.
    2. Lu, Lu, 1995. "A one-vendor multi-buyer integrated inventory model," European Journal of Operational Research, Elsevier, vol. 81(2), pages 312-323, March.
    3. Sajadieh, Mohsen S. & Thorstenson, Anders & Jokar, Mohammad R. Akbari, 2010. "An integrated vendor-buyer model with stock-dependent demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 46(6), pages 963-974, November.
    4. Hoque, M. A. & Goyal, S. K., 2000. "An optimal policy for a single-vendor single-buyer integrated production-inventory system with capacity constraint of the transport equipment," International Journal of Production Economics, Elsevier, vol. 65(3), pages 305-315, May.
    5. Hark-Chin Hwang, 2010. "Economic Lot-Sizing for Integrated Production and Transportation," Operations Research, INFORMS, vol. 58(2), pages 428-444, April.
    6. Ertogral, K. & Darwish, M. & Ben-Daya, M., 2007. "Production and shipment lot sizing in a vendor-buyer supply chain with transportation cost," European Journal of Operational Research, Elsevier, vol. 176(3), pages 1592-1606, February.
    7. Chan, Chi Kin & Kingsman, Brian G., 2007. "Coordination in a single-vendor multi-buyer supply chain by synchronizing delivery and production cycles," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(2), pages 90-111, March.
    8. Abad, P. L. & Aggarwal, Vijay, 2005. "Incorporating transport cost in the lot size and pricing decisions with downward sloping demand," International Journal of Production Economics, Elsevier, vol. 95(3), pages 297-305, March.
    9. Viswanathan, S., 1998. "Optimal strategy for the integrated vendor-buyer inventory model," European Journal of Operational Research, Elsevier, vol. 105(1), pages 38-42, February.
    10. Sarker, Bhaba R. & Parija, Gyana R., 1996. "Optimal batch size and raw material ordering policy for a production system with a fixed-interval, lumpy demand delivery system," European Journal of Operational Research, Elsevier, vol. 89(3), pages 593-608, March.
    11. Derek Atkins & Maurice Queyranne & Daning Sun, 1992. "Lot Sizing Policies for Finite Production Rate Assembly Systems," Operations Research, INFORMS, vol. 40(1), pages 126-141, February.
    12. Goyal, Suresh K. & Gupta, Yash P., 1989. "Integrated inventory models: The buyer-vendor coordination," European Journal of Operational Research, Elsevier, vol. 41(3), pages 261-269, August.
    13. Hark-Chin Hwang, 2009. "Inventory Replenishment and Inbound Shipment Scheduling Under a Minimum Replenishment Policy," Transportation Science, INFORMS, vol. 43(2), pages 244-264, May.
    14. Swenseth, Scott R. & Godfrey, Michael R., 2002. "Incorporating transportation costs into inventory replenishment decisions," International Journal of Production Economics, Elsevier, vol. 77(2), pages 113-130, May.
    15. Sajadieh, Mohsen S. & Akbari Jokar, Mohammad R., 2009. "Optimizing shipment, ordering and pricing policies in a two-stage supply chain with price-sensitive demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(4), pages 564-571, July.
    16. Lederer, Phillip J., 1994. "Competitive delivered pricing and production," Regional Science and Urban Economics, Elsevier, vol. 24(2), pages 229-252, April.
    17. Glock, C. H., 2012. "The joint economic lot size problem: a review," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 57811, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    18. Palsule-Desai, Omkar D., 2013. "Supply chain coordination using revenue-dependent revenue sharing contracts," Omega, Elsevier, vol. 41(4), pages 780-796.
    19. Ben-Daya, M. & Darwish, M. & Ertogral, K., 2008. "The joint economic lot sizing problem: Review and extensions," European Journal of Operational Research, Elsevier, vol. 185(2), pages 726-742, March.
    20. Hill, Roger M., 1997. "The single-vendor single-buyer integrated production-inventory model with a generalised policy," European Journal of Operational Research, Elsevier, vol. 97(3), pages 493-499, March.
    21. Kunter, Marcus, 2012. "Coordination via cost and revenue sharing in manufacturer–retailer channels," European Journal of Operational Research, Elsevier, vol. 216(2), pages 477-486.
    22. Glock, Christoph H., 2012. "The joint economic lot size problem: A review," International Journal of Production Economics, Elsevier, vol. 135(2), pages 671-686.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Raden Achmad Chairdino Leuveano & Mohd Nizam Ab Rahman & Wan Mohd Faizal Wan Mahmood & Chairul Saleh, 2019. "Integrated Vendor–Buyer Lot-Sizing Model with Transportation and Quality Improvement Consideration under Just-in-Time Problem," Mathematics, MDPI, vol. 7(10), pages 1-25, October.
    2. Feng Guo & Qi Liu & Dunhu Liu & Zhaoxia Guo, 2017. "On Production and Green Transportation Coordination in a Sustainable Global Supply Chain," Sustainability, MDPI, vol. 9(11), pages 1-20, November.
    3. Vahid Reza Soleymanfar & Ahmad Makui & Ata Allah Taleizadeh & Reza Tavakkoli-Moghaddam, 2022. "Sustainable EOQ and EPQ models for a two-echelon multi-product supply chain with return policy," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(4), pages 5317-5343, April.
    4. Sawik, Tadeusz, 2016. "Integrated supply, production and distribution scheduling under disruption risks," Omega, Elsevier, vol. 62(C), pages 131-144.
    5. Biswajit Sarkar & Sharmila Saren & Mitali Sarkar & Yong Won Seo, 2016. "A Stackelberg Game Approach in an Integrated Inventory Model with Carbon-Emission and Setup Cost Reduction," Sustainability, MDPI, vol. 8(12), pages 1-23, December.
    6. Sadeghi, Javad & Mousavi, Seyed Mohsen & Niaki, Seyed Taghi Akhavan & Sadeghi, Saeid, 2014. "Optimizing a bi-objective inventory model of a three-echelon supply chain using a tuned hybrid bat algorithm," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 274-292.
    7. X.J. Wang & S.H. Choi, 2016. "Impacts of carbon emission reduction mechanisms on uncertain make-to-order manufacturing," International Journal of Production Research, Taylor & Francis Journals, vol. 54(11), pages 3311-3328, June.
    8. Heydari, Jafar & Mahmoodi, Mansour & Taleizadeh, Ata Allah, 2016. "Lead time aggregation: A three-echelon supply chain model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 89(C), pages 215-233.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Glock, Christoph H., 2012. "The joint economic lot size problem: A review," International Journal of Production Economics, Elsevier, vol. 135(2), pages 671-686.
    2. Sajadieh, Mohsen S. & Larsen, Christian, 2015. "A coordinated manufacturer-retailer model under stochastic demand and production rate," International Journal of Production Economics, Elsevier, vol. 168(C), pages 64-70.
    3. Hariga, Moncer & Gumus, Mehmet & Daghfous, Abdelkader, 2014. "Storage constrained vendor managed inventory models with unequal shipment frequencies," Omega, Elsevier, vol. 48(C), pages 94-106.
    4. Ben-Daya, M. & Darwish, M. & Ertogral, K., 2008. "The joint economic lot sizing problem: Review and extensions," European Journal of Operational Research, Elsevier, vol. 185(2), pages 726-742, March.
    5. Beatriz Abdul-Jalbar & Roberto Dorta-Guerra & José M. Gutiérrez & Joaquín Sicilia, 2021. "Production/Inventory Policies for a Two-Echelon System with Credit Period Incentives," Mathematics, MDPI, vol. 9(15), pages 1-25, July.
    6. B.C. Giri & S. Sharma, 2014. "Lot sizing and unequal-sized shipment policy for an integrated production-inventory system," International Journal of Systems Science, Taylor & Francis Journals, vol. 45(5), pages 888-901, May.
    7. AlDurgam, Mohammad & Adegbola, Kehinde & Glock, Christoph H., 2017. "A single-vendor single-manufacturer integrated inventory model with stochastic demand and variable production rate," International Journal of Production Economics, Elsevier, vol. 191(C), pages 335-350.
    8. Hwang, Juhwen & Wan, Yat-wah, 2013. "A supplier–retailer supply chain with intermediate storage for batch ordering," International Journal of Production Economics, Elsevier, vol. 142(2), pages 343-352.
    9. Mostafa Parsa & Ali Shahandeh Nookabadi & Zümbül Atan & Yaser Malekian, 2022. "An optimal inventory policy for a multi-echelon closed-loop supply chain of postconsumer recycled content products," Operational Research, Springer, vol. 22(3), pages 1887-1938, July.
    10. Sajadieh, Mohsen S. & Fallahnezhad, Mohammad Saber & Khosravi, Maryam, 2013. "A joint optimal policy for a multiple-suppliers multiple-manufacturers multiple-retailers system," International Journal of Production Economics, Elsevier, vol. 146(2), pages 738-744.
    11. Sarmah, S.P. & Acharya, D. & Goyal, S.K., 2006. "Buyer vendor coordination models in supply chain management," European Journal of Operational Research, Elsevier, vol. 175(1), pages 1-15, November.
    12. Adeinat, Hamza & Pazhani, Subramanian & Mendoza, Abraham & Ventura, Jose A., 2022. "Coordination of pricing and inventory replenishment decisions in a supply chain with multiple geographically dispersed retailers," International Journal of Production Economics, Elsevier, vol. 248(C).
    13. Chan, Chi Kin & Fang, Fei & Langevin, André, 2018. "Single-vendor multi-buyer supply chain coordination with stochastic demand," International Journal of Production Economics, Elsevier, vol. 206(C), pages 110-133.
    14. Meherishi, Lavanya & Narayana, Sushmita A. & Ranjani, K.S., 2021. "Integrated product and packaging decisions with secondary packaging returns and protective packaging management," European Journal of Operational Research, Elsevier, vol. 292(3), pages 930-952.
    15. Chung, Chun Jen & Wee, Hui Ming, 2007. "Optimizing the economic lot size of a three-stage supply chain with backordering derived without derivatives," European Journal of Operational Research, Elsevier, vol. 183(2), pages 933-943, December.
    16. Abdul-Jalbar, Beatriz & Gutierrez, Jose M. & Sicilia, Joaquin, 2007. "An integrated inventory model for the single-vendor two-buyer problem," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 246-258, July.
    17. David, Israel & Eben-Chaime, Moshe, 2003. "How far should JIT vendor-buyer relationships go?," International Journal of Production Economics, Elsevier, vol. 81(1), pages 361-368, January.
    18. Dhahri, Akrem & Gharbi, Ali & Ouhimmou, Mustapha, 2022. "Integrated production-delivery control policy for an unreliable manufacturing system and multiple retailers," International Journal of Production Economics, Elsevier, vol. 245(C).
    19. Sarker, Bhaba R. & Rochanaluk, Ratkrit & Yi, Huizhi & Egbelu, Pius J., 2014. "An operational policy for a three-stage distributive supply chain system with retailers’ backorders," International Journal of Production Economics, Elsevier, vol. 156(C), pages 332-345.
    20. Asif Iqbal Malik & Biswajit Sarkar, 2020. "Coordination Supply Chain Management Under Flexible Manufacturing, Stochastic Leadtime Demand, and Mixture of Inventory," Mathematics, MDPI, vol. 8(6), pages 1-32, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:66:y:2014:i:c:p:23-35. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.