In Lu’s study (1995), previous purc

In Lu’s study (1995), previous
purchasing information and highest expected
acceptable cost were utilized to determine the
minimum value of the sum of the inventory
cost and setup cost. This paper mainly
proposed a solution method to seek the best
solution of inventory for the single-vender
and single-buyer. In addition, Lu (1995)
also developed a heuristic model to discuss
the coordinating mechanism among
single-vender and multi-buyer. Hill [4]
constructed a production and inventory
model with integration as a whole. In dealing
with the model, he assumed that the venders
produced the product at their greatest rate.
The objective was to minimize the total
inventory costs per unit time. This model was
expected to provide the venders with the
optimum production and delivery scheduling.
Viswanathan and Piplani (2001) further
proposed a model, which allowed the
venders to offer a price discount so as to
entice the buyers to accept the common
replenishment epochs. Furthermore, the
problem considered that there was only one
delivery when buyers placed an order each
time. The most optimum common
replenishment epochs were then obtained byminimizing the price discounts and the order
processing cost.