In this paper, we consider a single-manufacturer single-buyer supply chain problem where a single manufacturer purchases and processes raw materials into a family of items in order to deliver a family of items to a single buyer at a fixed interval of time for effective implementation of Just-In-Time Purchasing. An integrated multi-item lot-splitting model of facilitating multiple shipments in small lots between buyer and manufacturer is developed in a JIT Purchasing environment. Previous research on the integrated model assumed that the manufacturer orders raw materials m (integer) times for every production run (lot multiplier policy for the raw material). In this paper, we consider a generalized policy in the replenishment of raw materials, allowing lot multiplier policy and lot splitting policy. An iterative solution procedure is developed to find the order interval for finished goods and raw materials, and number of shipments between buyer and manufacturer. We show by numerical example that when the integrated policy is adopted by both buyer and manufacturer in a cooperative manner, both parties can benefit.

• 김대홍(한성대학교 산업경영공학과) | Dae-Hong Kim Corresponding Author