Container management in a single-vendor-multiple-buyer supply chain

Abstract

This paper studies a supply chain consisting of a single vendor and multiple retailers that uses returnable transport items, such as containers or crates, to facilitate shipping products from the vendor to the retailers. The paper considers two different strategies for transporting finished products from the supplier to the retailers: In case of early shipments, deliveries to a retailer can be made while the production process at the supplier is still in progress, while in the case of late shipments, the supplier has to wait until the entire production lot has been finished before shipments can be made from the lot. The paper develops mathematical models for both strategies and derives optimal solutions for the cycle time, the container size, the individual order quantities of the retailers and the shipment sequence with the intention to minimize the average total costs of the system. The behavior of the models is analyzed with the help of numerical examples.