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A two-echelon inventory model with stock-dependent demand and variable holding cost for deteriorating items
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10.3934:naco.2017002.pdf
Date
2017
Author
Pervin, Magfura
null, null
Kumar Roy, Sankar
Wilhelm Weber, Gerhard
Metadata
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This work is licensed under a
Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License
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In this study, we develop an inventory model for deteriorating items with stock dependent demand rate. Shortages are allowed to this model and when stock on hand is zero, then the retailer offers a price discount to customers who are willing to back-order their demands. Here, the supplier as well as the retailer adopt the trade credit policy for their customers in order to promote the market competition. The retailer can earn revenue and interest after the customer pays for the amount of purchasing cost to the retailer until the end of the trade credit period offered by the supplier. Besides this, we consider variable holding cost due to increase the stock of deteriorating items. Thereafter, we present an easy analytical closed-form solution to find the optimal order quantity so that the total cost per unit time is minimized. The results are discussed with the help of numerical examples to validate the proposed model. A sensitivity analysis of the optimal solutions for the parameters is also provided in order to stabilize our model. The paper ends with a conclusion and an outlook to possible future studies.
Subject Keywords
Algebra and Number Theory
,
Control and Optimization
,
Applied Mathematics
,
Inventory
,
Stock-dependent demand
,
Variable holding cost
,
Trade-credit
,
Deterioration
,
Price discount on backorder
,
Optimization
URI
https://hdl.handle.net/11511/52037
Journal
Numerical Algebra, Control & Optimization
DOI
https://doi.org/10.3934/naco.2017002
Collections
Graduate School of Applied Mathematics, Article
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M. Pervin, n. null, S. Kumar Roy, and G. Wilhelm Weber, “A two-echelon inventory model with stock-dependent demand and variable holding cost for deteriorating items,”
Numerical Algebra, Control & Optimization
, pp. 21–50, 2017, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/52037.