An Integrated Inventory Problem with Transportation in a Single-vendor Multiple-buyer Supply Chain Coordination with Stochastic Demand

In this paper, we propose an integrated inventory model with transportation of a single-vendor multi-buyer supply chain coordination where stochastic demand is considered. We discuss the synchronized cycles model (SSYN) coordination policy, in which the buyers' ordering cycles are synchronized with the vendor's production cycle. That is, buyers will choose their optimal replenishment intervals, and the vendor schedules the delivery of products accordingly. Then, we develop the joint total expected cost per unit time for the integrated SSYN with transportation assuming a normally distributed demand. We propose a state-of-the-art two-phase iterative approach to solve the model, where the SSYN model is first solved assuming direct shipment, and then the routes are determined by solving a vehicle routing problem. Finally, a numerical example is solved and its results are shown.