A multiple replenishment contract with ARIMA demand processes
- Authors
- Kim, Jong Soo; Shin,Ki-young; AHN, SEON EUNG
- Issue Date
- Nov-2003
- Publisher
- PALGRAVE PUBLISHERS LTD
- Keywords
- inventory; ARIMA; supply chain; replenishment contract
- Citation
- JOURNAL OF THE OPERATIONAL RESEARCH SOCIETY, v.54, no.11, pp.1189 - 1197
- Indexed
- SCIE
SCOPUS
- Journal Title
- JOURNAL OF THE OPERATIONAL RESEARCH SOCIETY
- Volume
- 54
- Number
- 11
- Start Page
- 1189
- End Page
- 1197
- URI
- https://scholarworks.bwise.kr/erica/handle/2021.sw.erica/46651
- DOI
- 10.1057/palgrave.jors.2601620
- ISSN
- 0160-5682
- Abstract
- This paper is concerned with a multiple replenishment contract with a purchase price discount in a supply chain. The chain is composed of one supplier, one buyer and consumers for a product. The replenishment contract is based upon the well-known (s, Q) policy, but allows us to contract replenishments at a future time with a price discount. Owing to the larger forecast error of future demand, the buyer should keep a higher level of safety stock to provide the same level of service as the usual (s, Q) policy. However, the buyer can reduce his purchase cost by ordering a larger quantity at a discounted price. Hence, there exists a trade-off between the price discount and the inventory holding cost. For the ARIMA demand processes, we present a model for the contract and an algorithm to find the number of the future replenishments. Computational experiments show that the algorithm finds the global optimum solution very quickly.
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Collections - COLLEGE OF ENGINEERING SCIENCES > DEPARTMENT OF INDUSTRIAL & MANAGEMENT ENGINEERING > 1. Journal Articles
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