A Stochastic Integrated Inventory Model Single Supplier-Single Retailer in Periodic Review with Losing Flexibility Cost

Efficiency in the supply chain can be established by integrating supplier-retailer inventory policy. This article proposes integrated model between under stochastic demand. aims to determine optimal review period and calculate total cost, including some defective items, backorder price discounts, losing flexibility costs. We assume that retailer order 'n' times for every 'm' shipment from supplier each production cycle a periodic review. Stochastic conditions cause sudden changes orders large quantities, eventually forcing reduce their setup policies. condition makes charged cost as compensation reduction pushed long-term partnership contract. Based on numerical examples sensitivity analysis, percentage of items significantly affects cost.