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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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    5. Glock, Christoph H., 2012. "The joint economic lot size problem: A review," International Journal of Production Economics, Elsevier, vol. 135(2), pages 671-686.
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