An integrated single-vendor single-buyer targeting problem with time-dependent process mean

Abstract

The inventory/production decisions in single-vendor single-buyer supply chain are integrated with the targeting problem in this paper. Traditionally, the process mean is assumed to be constant over time. However, it is common that production processes deteriorate with time and constant process mean assumption is not appropriate in this situation. In the proposed model, this restrictive assumption is relaxed and the process mean is considered to drift with time. Also, solution method is discussed and sensitivity analysis on the model’s key parameters is conducted. In particular, the effect of the shift in the process mean and the variation in the filling process are examined.