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The purpose of this paper is to investigate the impact of backroom storage in supply chain replenishment decision parameters: the order quantity based on the well-established economic order quantity (EOQ) model.

The authors develop an EOQ-type model to investigate the operational cost impact of the order quantity with backroom storage. Because of the discrete and discontinuous nature of the problem, a modification of an existing algorithm is applied to obtain an optimal order quantity. Numerical experiments derived from a leading retailer in Thailand are used to study the cost impact of the backroom.

The paper shows that the backroom storage will significantly affect the decision regarding the order quantity. If its effect is ignored, the cost increase can be as high as 30 per cent. The costs and operations of additional shelf-refill trips from the backroom must be carefully analyzed and included in the decisions of replenishment operations.

The model is a simplified version of the actual replenishment process. Validation from a real-world setting should be used to confirm the results. There are many additional opportunities to further integrate other issues in this problem such as shelf space decisions or joint order quantity between vendors and retailers.

The insights gained from the model will help managers, both retailers and vendors or manufacturers, make better decisions with regard to the order quantity policy in the supply chain.

Problems with backroom storage have been qualitatively described in the literature in the past decade. This paper is an early attempt to develop a quantitative model to analytically study the cost impact of backroom on order quantity decisions.

Discusses “recurrent approaches” to determining when to despatch a consolidated load. Unlike a “non‐recurrent approach” (which sets a target time or weight prior to accumulating orders and despatches when the target is reached), recurrent approaches re‐evaluate the shipment‐release decision several times within an order accumulation cycle. Presents two probabilistic recurrent models, one assuming private transportation and the other common carriage. Compares the performance of these models with the nonrecurrent rules of despatching the “economic shipment weight” or, in the case of common carriage, the minimum volume weight. Concludes that with both forms of transportation, the decision heuristic outperforms despatching the economic shipment weight when that weight is close to vehicle capacity. Shows that, with common carriage, the use of the more sophisticated model does not yield better cost results than the minimum volume weight despatch rule. Discusses the reasons for, and implications of, these results.

The terms “inventory” and “stock” are usually seen as being synonymous and are used to describe materials which can be identified at various stages of the transformation process in organisations. It is customary to divide inventory into three categories:

This paper aims to present a set of five models for the economic order quantity problem. Four models solve problems for a single product: incremental discounts with or without backorders and all-unit discounts with or without backorders, and the last model solves problems for the multiproduct case.

A basic integer non-linear model with binary variables is presented, and its flexible structure allows for all five models to be utilised with minor modifications for adaptation to individual situations. The multiproduct model takes into consideration the work of Chopra and Meindl (2012), who studied two types of product aggregations: full and adaptive. To find optimal or near-optimal solutions for the multiproduct case, the authors propose a simulated annealing metaheuristic application. Numerical examples are presented to improve the comprehension of each model, and the authors also present the efficiency of the simulated annealing algorithm through an example that aggregates 50 products, each one with different discount schemes and some allowing backorders.

Our model proved to be efficient at finding optimal or near optimal solutions even when confronted with mathematical complexities such as the allowance of backorders and incremental discounts.

Finally our model can process a mix of products with different discount schemes at the same time, and the simulated annealing metaheuristics could find optimal or near optimal solutions with very few iterations.

Inventory management is an extremely important function to any business, since inadequacies in control can result in serious problems. If inventories are managed in an inefficient manner, it is likely that delays in production, dissatisfied customers, or curtailment of working capital will result.

Describes the second stage in the development of a computer‐aided inventory management system (CAIMS) for PRESTO Tools Ltd, Sheffield. Describes the development of modules for calculating the re‐order level and economic batch quantity. Reviews the inventory control policies of the company and discusses the various options available to the company. The final part of the article describes and evaluates the operation of the system.

The purpose of this paper is to study integrated inventory system and pricing and ordering strategy for vendor‐buyer supply chain system. Here, the vendor offers a trade credit to the buyer when the buyer's order quantity exceeds a given pre‐specified quantity. Therefore, to incorporate the concept of vendor‐buyer integration and trade credit linked, the authors analyze the model to determine the optimal strategy for an integrated vendor‐buyer inventory system under the condition of credit linked to the order quantity when demand is quadratic.

A mathematical model for integrated inventory system is developed when demand rate is increasing function of the time and decreasing function of the retail price. By analyzing the total channel profit function, the authors developed some useful results to characterize the optimal solution and provide an iterative algorithm to find the retail price, buyer's order quantity and the number of shipments per production run from the vendor to the buyer.

By developing a solution algorithm, the optimal retail price, order quantity and number of shipments from the vendor to the buyer are provided. Numerical examples and sensitivity analyses are presented to validate the proposed model. Through extensive numerical analyses, it is observed that a longer credit term increases profits of the player for the entire supply chain. The vendor should establish the threshold for allowing trade credit comprehensively to ensure the greatest benefit for both players.

Most of the research articles available in the literature considered the constant demand or linearly changing demand. In this paper, a mathematical model is developed considering time dependent quadratic demand. Very few researchers have investigated joint optimal policy in vendor‐buyer supply chain system, considering trade credit is linked to order quantity, and still there are not many findings on the benefit of integrated policy and trade credit.

In today′s competitive global economy, every business can benefit from managing its operations in a cost‐efficient manner. Managing materials should be no exception and the effect of inflation on ordering policies for purchased materials and supplies should be carefully analysed. It is very likely that a business can place itself in an advantageous position by changing its ordering policies in response to unfavourable economic conditions in its future operating environment. Presents a total cost model and, through simulation analysis, shows that inflationary conditions do affect lot sizes. Also shows that there are instances where lot sizes stay stable before changing again in response to increase in inflationary rates.

In inventory theory the inventory holding cost per unit plays an important part. In most transactions concerning selling and buying a certain postponement of payment is offered or accepted by the seller. This should have some consequences for the order size and can be regarded as a kind of discount. Traditionally, when average costs (AC) are used, these kinds of effects are not explicitly incorporated in the classical formulas for economic order quantities (EOQs). On the other hand, such effects have been treated to a certain degree in the literature when a present value criterion (PVC) is used to estimate the inventory holding costs over a certain time interval. However, in these models one does not differentiate between the holding costs incurred by the capital tied up in the inventory and other costs incurred by storing an item. Approaches this problem in an AC manner, but, opposed to the PVC, splits the inventory holding costs into two parts. Offers an EOQ formula for the simple case of a single item stored; enhances this formula for a situation where a family of items are ordered in a co‐ordinated way, and into a situation with stochastic demand for a single item. Finally, interprets the postponed payment in terms of an all unit discount.

To develop an EOQ based model to quantify the benefit accrue due to coordination for the one supplier and n retailer supply chain system and concept to share the benefits derived from coordination.

An intensive literature review has been done in the area of supply chain coordination covering both marketing and operational perspective. The analysis of literature has shown that models to quantify the benefits for supply chains consisting of a single supplier who supplies a product to multiple heterogeneous buyers are very limited. To fill this critical research gap the benefit sharing mechanism is derived based on optimal order quantity of the supply chain system.

This paper demonstrates the benefits of coordination to the supply chain system in terms of cost saving and generating the surplus money. It also suggests a way to find the range of prices to facilitated coordination. Under the developed pricing policy, no partner after coordination had to bear a loss. So in that sense we can say that the benefits of coordination are distributed to all the partners.

The proposed model for benefit sharing protects the interest of all supply chain partners and hence will be profitable to all. The pricing scheme suggested will motivate retailers to increase ordering quantity per order, thereby reducing the joint ordering and holding costs.

The paper is unique in terms of quantifying and sharing the benefits of coordination for one supplier – multi heterogeneous buyer supply chain system.