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MULTI‐ITEM INVENTORY SYSTEMS WITH AMALGAMATION OF ORDERS TO SUPPLIERS *
Author(s) -
THOMPSON H. E.,
FEDER T. L.,
KRAJEWSKI L. J.
Publication year - 1970
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1970.tb00788.x
Subject(s) - computer science , inventory theory , order (exchange) , integer programming , operations research , economic order quantity , mathematical optimization , inventory control , inventory management , linear programming , perpetual inventory , operations management , supply chain , economics , mathematics , business , algorithm , marketing , finance
This paper extends the analysis of the multi‐item inventory systems with amalgamation of orders to the case where there is more than one possible supplier. The problem is to assign each inventory item to an order period and a supplier such that the total inventory costs are minimized. The model is formulated as an integer programming problem which can be solved by standard linear programming techniques. In addition to providing the framework for selecting the supplier for an item, the model can include different ordering and review costs, price differentials between suppliers, quantity discounts, inventory constraints and ordering constraints. Numerical examples illustrating the use of the model are provided.