Integrated cooperative inventory models with one vendor and multiple buyers in the supply chain

Nowadays, supply chain management (SCM) is a popular practice in manufacturing systems. The concept of SCM has forced members to find ways to cut costs and bring performance benefits to the firms. In the creation of long-term partnerships in the supply chain, the collaboration between supply chain partners for improving the performance of inventory control is of special interest. This paper develops a single-vendor multiple-buyer integrated inventory model for minimising the total relevant annual costs incurred by the vendor and the buyers while the probability distribution of the lead time demand is normal, and the option of investing in process quality improvement is included. [Received 11 November 2009; Revised 26 June 2010; Accepted 16 September 2010]