Considering single-vendor and multiple-buyers integrated supply chain inventory model with lead time reduction

Enterprises within a supply chain can cut their expected inventory costs, raise service level, reduce losses caused by shortages, gain quick-response capability, and improve competitiveness by lead time reduction. However, the extra crashing cost spent within a supply chain partnership will inevitably increase with the shortening of the lead time. On the other hand, the longer the lead time, the larger the amount of safety stock that must be held. The problem of determining a suitable policy of inventory and purchasing management is investigated in this study, with the objective of minimizing total expected inventory costs with multiple partners. This paper presents a single-vendor multiple-buyer integrated inventory model with controllable lead time in which the distribution of lead time demand is normal.