Joint Economic Lot Sizing Optimization in a Supplier-Buyer Inventory System When the Supplier Offers Decremental Temporary Discounts
Abstract: This research
discusses mathematical models
of joint economic
lot size optimization
in a supplier-buyer inventory
system in a situation when the supplier offers decremental temporary discounts during a
sale period. Here,
the sale period
consists of n
phases and the
phases of discounts
offered descend as much as the number of phases. The highest discount
will be given when orders are placed in the first phase while the lowest one
will be given when they are placed in the last phase. In this situation, the
supplier attempts to attract the buyer to place orders as early as possible
during the sale period. The buyers
will respon these
offers by ordering
a special quantity
in one of
the phase. In
this paper, we propose such a forward buying model with
discount-proportionally-distributed time phases. To examine the behaviour
of the proposed
model, we conducted
numerical experiments. We
assumed that there
are three phases of discounts during the sale period. We then compared
the total joint costs of special order placed in each phase for two scenarios.
The first scenario is the case of independent situation – there is no
coordination between the
buyer and the
supplie-, while the
second scenario is
the opposite one,
the coordinated model. Our
results showed the
coordinated model outperform
the independent model
in terms of producing
total joint costs.
We finally conducted
a sensitivity analyzis
to examine the
other behaviour of the proposed model.
Keywords: supplier-buyer inventory
system, forward buying
model, decremental temporary
discounts, joint economic lot sizing, optimization
Author: Diana Puspita Sari and
Ahmad Rusdiansyah
Journal Code: jptindustrigg080003
