Stochastic Integrated Vendor-Buyer Model with Negative Exponential Crashing Cost

Authors:

Chandra K. Jaggi (University of Delhi)

Nectu Arneja (Hansraj College)

Haider Ali (University of Delhi)

Keywords: Crashing cost, Inventory control, Lead time reduction, Service level.

Abstract:

This study deals with integrated vendor buyer model where vendor 's and buyer's perspective are different. Vendor's objective Is to reduce materials lead time as far as possible to compete in the market. A vendor produces the ordered quantity and delivered it to the buyer in 'm' number of shipment where buyer's lead time for each order is not the same, which distinguishes this paper from the previous study. Buyer's aim is to earn a good reputation In the market by fulfilling the customer's demand on time with higher service level. The proposed model jointly optimizes buyer's ordered quantity, number of shipments and vendor's lead time. Numerical examples are presented to illustrate the results.