Vendor-managed inventory system with partial backordering for evaporating chemical raw material

Abstract

Consider a supply chain including a refinery producing evaporating chemical product, an exporter, and one or some engine oil producers outside the exporter's country. The exporter uses vendor-managed inventory system implemented between refinery and exporter to decrease his/her inventory cost. This paper develops two models with partial backordering for evaporating chemical product developed in a two-layer chain including single refinery and single exporter with one product before and after utilizing vendormanaged inventory policy. Demand and partial backordering rates are deterministic and constant. A numerical example is provided to illustrate the applicability of the proposed model and solution method.