TY - JOUR
T1 - The production size and inventory policy for a manufacturer in a two-echelon inventory model
AU - Lin, Chinho
AU - Lin, Yihsu
N1 - Funding Information:
The authors wish to thank both the Editor-in-Chief and the anonymous referees for their precious suggestions, which contributed to the improvement of the presentation of this paper. This work was partially supported by National Science Council, Taiwan, R.O.C., under Grant NSC90-2218-E006-028.
PY - 2005/5
Y1 - 2005/5
N2 - This paper proposes a two-echelon inventory model for a periodical commodity, in which the market and manufacturing channels are combined. This model can be used to solve the production policy, the order policies of the raw materials for the manufacturer, and order size for the retailer. By assuming that the retailers' demand obeys normal distribution and that the retailer makes orders according to the Newsboy Rule, we derive the necessary and sufficient conditions for the optimal solution of production size, wholesale price, and replenishment cycle of raw materials for the manufacturer. Also, the necessary condition is explored in order to gain managerial insights and economic implications based on numerical examples and sensitivity analysis.
AB - This paper proposes a two-echelon inventory model for a periodical commodity, in which the market and manufacturing channels are combined. This model can be used to solve the production policy, the order policies of the raw materials for the manufacturer, and order size for the retailer. By assuming that the retailers' demand obeys normal distribution and that the retailer makes orders according to the Newsboy Rule, we derive the necessary and sufficient conditions for the optimal solution of production size, wholesale price, and replenishment cycle of raw materials for the manufacturer. Also, the necessary condition is explored in order to gain managerial insights and economic implications based on numerical examples and sensitivity analysis.
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U2 - 10.1016/j.cor.2003.10.003
DO - 10.1016/j.cor.2003.10.003
M3 - Article
AN - SCOPUS:7544222054
VL - 32
SP - 1181
EP - 1196
JO - Computers and Operations Research
JF - Computers and Operations Research
SN - 0305-0548
IS - 5
ER -