Vendor managed inventory model with deteriorating items and partial backlogging under integer ratio strategy.

We give a single vendor and single buyer VMI model in which raw materials are no deteriorating, items are deteriorating and buyer faces partial backlogging for unmet demand. It's not necessarily the best optimal way that vendor employs lot-for-lot strategy to yield items for the impact of setup cost. Therefore, we allow that vendor employs integer ratio strategy to procure raw materials and yield items, which means that each batch of raw materials procurement meet integer time of production, and each batch of items yield meet integer time of replenishment to buyer. We get these decision variables of time that meet production of each batch of raw materials procurement, time that meet replenishment to buyer of each batch of items yield, replenishment interval and buyer's service level by solving steps based on genetic algorithm. The result of numerical example indicates that the VMI system can get the satisfied solution of minimum per unit time total cost when vendor employs integer ratio strategy to procure raw materials and yield items. The respective change of setup cost, deterioration rate and losing sale ratio has an affect on vendor decision to produce and the minimum per unit time total cost of VMI system. [ABSTRACT FROM AUTHOR]