Joint replenishment policy in inventory-production systems

Abstract

Much of the literature pertaining to Joint Replenishment Policy only takes into account the optimisation of the replenished item inventory in which the demand of each replenished item is dependent on the predetermined production cycle. This paper attempts to solve the problem of optimising the production cycle of finished item and the joint replenishment cycle of raw materials simultaneously. The considered scenario is an integrated inventory system where a single vendor consumes and purchases raw materials from a single supplier in order to produce a specific finished item. To globally optimise the integrated inventory system, a new model is developed and an algorithm is proposed to solve the model. Finally highlighting the advantage of the proposed model a case study that is followed by a comparison study is given.