Integrated economic ordering policy for vendor and buyer with deteriorating items

Abstract

Joint buyer and vendor inventory decision problems have drawn great amount of attention during recent years. The issue becomes more interesting and general when deterioration effect is considered for inventory items. A famous paper is conducted by Yang and Wee (2000). However, this paper mistakenly makes double calculation of those items that have been delivered to the buyer and the overstated vendor’s and JEL carrying cost may lead to wrong decision. An approach for calculating total inventory holding first used by Joglekar (1990) has been applied in this paper to remodel this complex problem and an analytical result of JELS cost expression is obtained. A numerical example is given to illustrate the model.

Keywords:

• Inventory
• deterioration
• buyer
• vendor