Optimizing the Two-Stage Supply Chain Inventory Model with Full Information Sharing and Two Backorders Costs Using Hybrid Geometric-Algebraic Method

We consider the case of a two-stage serial supply chain system. This supply chain system involves a single vendor who supplies a single buyer with a single product. The vendor's production rate is assumed finite. In addition, the demand at the buyer is assumed deterministic. In order to coordinate their replenishment policies and jointly optimize their operational costs, the two supply chain partners fully share their relevant information. For this purpose, we develop an integrated inventory replenishment model assuming linear and fixed backorders costs. Then, we use a hybrid geometric-algebraic method to drive the optimal replenishment policy and the minimum supply chain total cost in a closed form.