A JIT lot-splitting model for supply chain management: Enhancing buyer–supplier linkage

This study develops a buyer–supplier coordination model to facilitate frequent deliveries in small lot sizes in a manufacturing supply chain. The proposed model, based on the integrated total relevant costs of both buyer and supplier, determines optimal order quantity, the number of deliveries/setup...

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Bibliographic Details
Published in:International journal of production economics 2003-10, Vol.86 (1), p.1-10
Main Authors: Kim, Seung-Lae, Ha, Daesung
Format: Article
Language:English
Subjects:
Buyer–supplier linkage
Integrated inventory model
Inventory control
Just in time
Just-in-time manufacturing
Lot-splitting strategy
Manufacturing
Mathematical models
Operations research
Order quantity
Studies
Suppliers
Supply chains
Vendor supplier relations
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Summary:This study develops a buyer–supplier coordination model to facilitate frequent deliveries in small lot sizes in a manufacturing supply chain. The proposed model, based on the integrated total relevant costs of both buyer and supplier, determines optimal order quantity, the number of deliveries/setups, and shipping quantity over a finite planning horizon in a relatively simple JIT single buyer single supplier scenario. Under deterministic conditions for a single product, we show that the optimal delivery policy adopted by both buyer and supplier in a cooperative manner can be economically beneficial to both parties. It is shown that the optimal delivery size can be unique, regardless of the order quantity and the number of deliveries. Numerical results are also presented.
ISSN:0925-5273
1873-7579
DOI:10.1016/S0925-5273(03)00006-9