Abstract: The supply pattern based on supply-hub under the Just-In-Time (JIT) environment is considered, and the average cost function of manufacturer, supply-hub, and supplier is established. Moreover, the production and order lot-size models of the supply-hub operation and cost, which manufacturer and supplier are responsible for, respectively, are proposed. The results show that under the condition that supply-hub is appropriate,it is more favorable to the supplier than to the manufacturer when the supplier is responsible for supply-hub operation and cost comparing with the manufacturer is responsible for, but the total cost of the supply chain is reduced. It is able to reduce the costs of the manufacturer and the supplier on certain level through negotiations and interest transfer, therefore entire supply chain is achieved Pareto optimization; Moreover, with the distance between the supplier and supply-hub is the further, it is more favorable to the supply chain when the supplier is responsible for supply-hub operation and cost rather than the manufacturer is responsible for that.

Key words: JIT, supply-hub, integrated procurement-production system, Pareto optimization