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Multi-vendor integrated procurement-production system under shared transportation and just-in-time delivery system

Author

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  • Z X Chen

    (Sun Yat-Sen University)

  • B R Sarker

    (Louisiana State University)

Abstract

Just-in-time (JIT) procurement is one of the important elements of lean production system. Successful implementation of JIT needs vendor-manufacturer cooperation on small lot size delivery and inbound logistics cost reduction. Unlike the most recent literature focusing on single-vendor and single-buyer integrated inventory systems, this paper studies a multi-vendor integrated procurement-production inventory system that incorporates delivery and shared transportation costs. A multi-vendor optimal model is developed here for deciding the batch size of vendor's production, and delivery frequencies of different vendors to the manufacturer. Solution procedures for two special cases—uncapacitated and capacitated models are developed; especially, a new approximate method for capacitated model is devised. Numerical examples demonstrate the solution mechanism for the model. The results highlight cooperation between vendors and manufacturers on JIT procurement practices.

Suggested Citation

  • Z X Chen & B R Sarker, 2010. "Multi-vendor integrated procurement-production system under shared transportation and just-in-time delivery system," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(11), pages 1654-1666, November.
    • Handle: RePEc:pal:jorsoc:v:61:y:2010:i:11:d:10.1057_jors.2009.115
    DOI: 10.1057/jors.2009.115
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    References listed on IDEAS

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    Cited by:

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    2. Boliang Lin & Fan Yang & Shuting Zuo & Chang Liu & Yinan Zhao & Mu Yang, 2019. "An Optimization Approach to the Low-Frequency Entire Train Formation at the Loading Area," Sustainability, MDPI, vol. 11(19), pages 1-15, October.
    3. Tiwari, Sunil & Kazemi, Nima & Modak, Nikunja Mohan & Cárdenas-Barrón, Leopoldo Eduardo & Sarkar, Sumon, 2020. "The effect of human errors on an integrated stochastic supply chain model with setup cost reduction and backorder price discount," International Journal of Production Economics, Elsevier, vol. 226(C).
    4. Glock, Christoph H., 2012. "The joint economic lot size problem: A review," International Journal of Production Economics, Elsevier, vol. 135(2), pages 671-686.
    5. Petering, Matthew E.H. & Chen, Xi & Hsieh, Wen-Huan, 2019. "Inventory control with flexible demand: Cyclic case with multiple batch supply and demand processes," International Journal of Production Economics, Elsevier, vol. 212(C), pages 60-77.
    6. Dana Marsetiya Utama & Fakhrina Fahma Abdullah & Ikhlasul Amallynda & Teguh Baroto, 2024. "Integrated production-inventory model for multi-item raw materials with exponential quality degradation: a real case study," OPSEARCH, Springer;Operational Research Society of India, vol. 61(4), pages 1862-1887, December.
    7. Utama, Dana Marsetiya & Santoso, Imam & Hendrawan, Yusuf & Dania, Wike Agustin Prima, 2022. "Integrated procurement-production inventory model in supply chain: A systematic review," Operations Research Perspectives, Elsevier, vol. 9(C).
    8. Fatnassi, Ezzeddine & Chaouachi, Jouhaina & Klibi, Walid, 2015. "Planning and operating a shared goods and passengers on-demand rapid transit system for sustainable city-logistics," Transportation Research Part B: Methodological, Elsevier, vol. 81(P2), pages 440-460.
    9. Ali Ekici & Baṣak Altan & Okan Örsan Özener, 2016. "Pricing decisions in a strategic single retailer/dual suppliers setting under order size constraints," International Journal of Production Research, Taylor & Francis Journals, vol. 54(7), pages 1887-1898, April.

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