As the popularity of the Internet system,
the distance between the supplier and the
customer is greatly shortened. As a result, the
globalization has changed the trend of the
commercial behavior between two
organizations (Thomas and Griffin, 1996).
To cope with the competitiveness of global
market, the enterprise’s decisions have now
been based on seeking a global optimum of
supply chain instead of the traditional local
optimum. The enterprise owner also
recognizes the fact that the integrating and
coordinating with all members of upstream
and downstream of supply chain will result in
more effective management, and reach the
win-win for both venders and buyers.
Therefore, this research will study the
problem of one-vender supplying a product
to multi-buyer (customers). Through the
mutual agreement between buyers and
vender, the vender offers a price discount to
entice the buyers to accept the policy of
common replenishment epochs (CRE). The
objective is to determine the most optimum
ordering and replenishment epochs by
minimizing the vender’s total costs of order
processing and transportation subjected to
the maximum costs which buyers are
prepared to incur.