Using easy methods to derive an integrated vendor-buyer inventory system under shortage allowed

Wu and Ouyang (Production Planning & Control, Vol. 14 (2003), No. 6, pp.555-561) derived the integrated vendor-buyer system with shortages using algebraic method to determine the optimal replenishment policy. In this note, we will off er both basic inequalities, arithmetic-geometric mean inequal...

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Bibliographic Details
Published inJournal of information & optimization sciences Vol. 32; no. 5; pp. 1059 - 1064
Main Authors Hsu, Kuang-Hua, Huang, Yung-Fu, Chen, Hsin-Fan, Tu, Yu-Cheng
Format Journal Article
LanguageEnglish
Published Delhi Taylor & Francis Group 01.09.2011
Taru Publications
Subjects
Algebra
arithmetic-geometric mean inequality
Cauchy-Bunyakovsky-Schwarz inequality
Inequality
integrated inventory system
Inventory control
Order quantity
Production planning
shortage
single-vendor single-buyer
Studies
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Summary:Wu and Ouyang (Production Planning & Control, Vol. 14 (2003), No. 6, pp.555-561) derived the integrated vendor-buyer system with shortages using algebraic method to determine the optimal replenishment policy. In this note, we will off er both basic inequalities, arithmetic-geometric mean inequality (AGM) and Cauchy-Bunyakovsky-Schwarz inequality (CBS), to derive both the optimal buyer's lot size and backorder level under the integrated total cost per unit time of the vendor and buyer minimized. Without the method of completing perfect square, the proposed methods derive the global minimum of the integrated total cost per unit time of the vendor and buyer more easily than the algebraic approach used by Wu and Ouyang (2003).
ISSN:0252-2667
2169-0103
DOI:10.1080/02522667.2011.10700104