Models of Centralized Inventory for Single-Vendor and Single-Buyer System with Controllable Leadtime and Batch of Production

Yevita Nursanti


This research will be developed a model of centralization between vendor-buyer with probabilistic demand ,lot quantities, leadtime, frequency of delivery and batch of production as one of the decision variables. The objectives of this research were total cost minimization on vendor and buyer. The mathematical model was developed by attempting various inputs on the model and comparing the results for each variation of the model inputs to obtain mutually beneficial policies on vendors and buyer. Lead time can be reduced by adding crashing costs (extra costs incurred to shorten lead time), so lead time can be controlled. Benefits from reduced lead times are low safety stocks, reduced stock outs, improved service levels to consumers, and provide competitive advantage, as evidenced by Just-In-Time (JIT) production. At the end, the authors evaluate the advantages of the coordination strategy offered by numerical examples.This paper describes one types of models with controlled lead times, a model with centralized decision model. The solution to be given is the optimal solution.

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