Int. J. Production Economics 108 (2007) 100–110 Coordinating ordering/shipment policy for buyer and supplier: Numerical and empirical analysis of influencing factors Peter Kelle a,Ã , Pamela A. Miller b , Asli Y. Akbulut c a Louisiana State University, USA b Northwestern State University, USA c Grand Valley State University,USA Available online 23 January 2007 Abstract The deficiencies in previous quantitative models for buyer–supplier coordination in a just-in-time (JIT) environment are corrected. An expanded model incorporating additional factors is developed and the factors are ranked through a detailed numerical analysis. Factor ranks are then compared with results of a series of semi-formal interviews with supplier and purchasing representatives. Published by Elsevier B.V. Keywords: Supply chain management; Buyer-supplier relationships; JIT; Optimal order/shipment policy; Policy coordination 1. Introduction Managers widely agree that efficient supply chain management requires the cooperation of buyer– supplier partners throughout the whole supply chain from raw material suppliers to the final customer. Collaborative planning and cost reduction initiatives are based on the value chain principle. Alignment of the supply chain by optimizing the relationship and processes between manufacturers and distributors can provide a win–win environment. In the spirit of buyer–supplier cooperation and coordination, Banerjee (1986) developed a model that finds the order quantity that minimizes the total relevant costs for the buyer and the supplier called the joint order quantity. Goyal (1988) adjusted this model to allow the supplier to produce in lot sizes that are a multiple of the purchaser’s order quantity. Other quantitative results were published later in this area by Golhar and Sarker (1992) and Banerjee and Kim (1995). Miller and Kelle (1998) extended these models by including the shipping cost, multi- ple deliveries, and an adjustment of the supplier’s holding cost to reflect multiple deliveries. Hill (1997) considered a more general type of policy based on successive shipments to the buyer. In Kelle and Miller (1998), a safety stock factor is added to combat the uncertainty that can occur in transition to just-in-time (JIT). The optimal batch sizes and raw material purchasing policies are determined in Khan and Sarker (2002). Quantitative support for negotiation is provided in Kelle et al. (2003). Several quantitative and qualitative results have been published recently on the coordination and cooperation between the two parties suggesting ARTICLE IN PRESS www.elsevier.com/locate/ijpe 0925-5273/$ - see front matter Published by Elsevier B.V. doi:10.1016/j.ijpe.2006.12.005 Ã Corresponding author. E-mail addresses: millerp@nsula.edu (P. Kelle), qmkell@lsu.edu (P.A. Miller), akbuluta@gvsu.edu (A.Y. Akbulut).