Optimal supplier inventory control policies when buyer purchase incidence is driven by past service

Optimizing Supplier Selection and Order Lot-Sizing Decisions in a Two-Stage Supply Chain

“…They presented two MINLP models to find optimal solutions of supplier selection, retail price, order quantity, and number of orders per replenishment cycle for each selected supplier. Liberopoulos and Deligiannis [39] developed an optimal inventory control policy for a supplier when the buyer's purchase decision is influenced by past service levels, which considers the buyer's ordering behavior and the supplier's capacity constraints and trade credit terms, and they showed that the optimal policy can achieve substantial cost savings for both parties. Schmelzle and Mukandwal [40] investigated the impact of supply chain relationship configurations on supplier performance by analyzing buyer-supplier relationships in the aerospace industry, which identified the key dimensions of relationship quality, including trust, communication, and coordination, and they showed that high-quality relationships lead to improved supplier performance in terms of cost, quality, and delivery.…”

“…When the production rates of suppliers are greater than or equal to the demand rate, Equations ( 8) and ( 9) can be rewritten as Equations (39) and (40) to represent suppliers' inventory, I S k , k∈ R 1 , and inventory holding cost (IHC S R 1 ), as shown in [1].…”