A Note on Stock Replenishment and Shipment Scheduling for Vendor-Managed Inventory Systems

In a recent paper, Cetinkaya and Lee (2000) model integrated inventory control and shipment scheduling in connection with vendor-managed inventory (VMI). The model is optimized by an approximate technique. This note provides a simple procedure for exact optimization, and illustrates that the errors when using the suggested approximate technique may be very large for certain types of problems. We also suggest a new approximation and an adjustment that can be used to improve both the original and new heuristic.