A two-phase approach for jointly determining the lot size and delivery policy in a vendor-buyer integrated system with rework

This paper presents a two-phase algebraic approach for jointly determining the lot size and delivery policy in a vendor-buyer integrated system with rework. Conventional method uses the differential calculus for solving production-shipment problem with the need for proving optimality first on the system cost function. This study proposes a two-phase algebraic solution procedure to derive the optimal lot size as well as optimal number of deliveries without using derivatives. The proposed approach enables practitioners who maybe without sufficient knowledge of calculus to understand such a specific real world problem with ease.