A delayed payment method in co-ordinating a single-vendor multi-buyer supply chain

In this paper, we consider a co-ordinated single-vendor multi-buyer supply chain model by synchronizing ordering and production cycles with delayed payments that are based on the buyers' order intervals. It can be shown that the synchronized cycles policy works better, in terms of total system costs, than independent optimization. While the vendor is benefited from the co-ordination by synchronized cycles, this research proposes a co-ordination mechanism that incorporates a delayed payment method which can guarantee that a buyer's total relevant cost of co-ordination will not be increased when compared with independent optimization. Most importantly, the vendor does not require any cost information from the buyers when applying this co-ordination mechanism. (C) 2010 Elsevier B.V. All rights reserved.