A single-vendor multi-buyer integrated production-inventory system with stock-dependent demand

In this paper, a manufacturing system is considered, in which a single vendor procures raw material from a single supplier through single/multiple procurement, processes the material to make finished products and ships the products to multiple buyers in single/multiple shipments who then store them in warehouses before presenting the products to end customers in display areas with single/multiple transfers. The demand rate is assumed to be positively dependent on the level of items displayed. A mathematical model for this problem is developed, the effectiveness of the model is illustrated and a sensitivity analysis of the optimal solution with respect to different sets of parameter is presented with numerical example.