The consignment stock of inventories in coordinated model with generalized policy

More general consignment stock policies for the vendor-buyer model are presented.Delivery schedules and the inventory patterns are described in different scenarios.Optimal solutions are found and illustrated with numerical examples.Solution procedures for optimal generalized CS-policies are given. In this paper, coordination between a single vendor (or manufacturer) and a buyer (or retailer) via the delivery schedule in a production and distribution system is presented. A continuous deterministic model with centralized decision process is developed. To satisfy the buyer's demands, the product is delivered in discrete batches from the vendor's stock to the buyer's stock and all shipments are realized instantaneously. A more general type of consignment stock (CS) policies for the vendor-buyer integrated production-distribution model is analyzed. Our model does not require equal in size shipments. The inventory patterns and the cost structure of production distribution cycles (PDC) are described in different scenarios. A comparative study of the results shows that the generalized CS policies perform better. Considering CS-policies Braglia and Zavanella (2003) ask about a possibility of cost reduction by delaying a number of late deliveries. Unfortunately, a negative answer was given by Zanoni and Grubbstrom (2004). We verify this problem to obtain a positive answer in more general setting. A solution procedure is developed to find optimal generalized CS-policy for the problems with nonequal and equal in size deliveries. Optimal solutions are found and illustrated with numerical examples.

[1]  C. Glock.  The joint economic lot size problem: A review , 2012 .

[2]  S. Zanoni,et al.  A one-vendor multi-buyer integrated production-inventory model: The 'Consignment Stock' case , 2009 .

[3]  Bhaba R. Sarker,et al.  An operational policy for an integrated inventory system under consignment stock policy with controllable lead time and buyers' space limitation , 2013, Comput. Oper. Res..

[4]  Jen-Ming Chen,et al.  Channel coordination under consignment and vendor-managed inventory in a distribution system , 2010 .

[5]  Mehmet Gumus,et al.  Impact of Consignment Inventory and Vendor-Managed Inventory for a Two-Party Supply Chain , 2006 .

[6]  A. Banerjee.  A JOINT ECONOMIC-LOT-SIZE MODEL FOR PURCHASER AND VENDOR , 1986 .

[7]  R. M. Hill,et al.  Another look at the single-vendor single-buyer integrated production-inventory problem , 2006 .

[8]  S. K. Goyal,et al.  A vendor managed inventory model under contractual storage agreement , 2013, Comput. Oper. Res..

[9]  Suresh Kumar Goyal,et al.  An integrated inventory model for a single supplier-single customer problem , 1977 .

[10]  M. Jaber,et al.  Vendor managed inventory (VMI) with consignment considering learning and forgetting effects , 2012 .

[11]  Yunzeng Wang,et al.  Production , Manufacturing and Logistics Consignment contracting : Who should control inventory in the supply chain ? , 2009 .

[12]  Stanisław Bylka,et al.  Non-cooperative consignment stock strategies for management in supply chain , 2013 .

[13]  Lu Lu.  A one-vendor multi-buyer integrated inventory model , 1995 .

[14]  Simone Zanoni,et al.  A note on an industrial strategy for stock management in supply chains: modelling and performance evaluation , 2004 .

[15]  Roger M. Hill,et al.  The optimal production and shipment policy for the single-vendor singlebuyer integrated production-inventory problem , 1999 .

[16]  Simone Zanoni,et al.  A Stochastic Single-vendor Single-buyer Model under a Consignment Agreement , 2007, APMS.

[17]  Sarada Prasad Sarmah,et al.  Buyer vendor coordination models in supply chain management , 2006, Eur. J. Oper. Res..

[18]  M. Braglia,et al.  Modelling an industrial strategy for inventory management in supply chains: The 'Consignment Stock' case , 2003 .