A two-echelon inventory model with stock-dependent demand and variable holding cost for deteriorating items

Download

10.3934:naco.2017002.pdf

Date

2017

Author

Pervin, Magfura
null, null
Kumar Roy, Sankar
Wilhelm Weber, Gerhard

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

153
views

196
downloads

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

Suggestions

OpenMETU
Core

Optimal pricing and ordering policy for non-instantaneous deteriorating items under inflation and customer returns Ghoreishi, M.; Mirzazadeh, A.; Weber, Gerhard Wilhelm (Informa UK Limited, 2014-01-01) This paper deals with an economic production quantity inventory model for non-instantaneous deteriorating items under inflationary conditions considering customer returns. We adopt a price-and time-dependent demand function. Also, the customer returns are considered as a function of both price and demand. The effects of time value of money are studied using the Discounted Cash Flow approach. The main objective is to determine the optimal selling price, the optimal replenishment cycles, and the optimal produ...
An integrated vendor-buyer model with quadratic demand under inspection policy and preservation technology Pervin, Magfura; Roy, Sankar Kumar; Weber, Gerhard Wilhelm (2020-01-01) An integrated vendor-buyer model for deteriorating items is formulated in this study. To control deterioration rate, the vendor adopts preservation technology. Shortages are allowed for both vendor and buyer. During shortage period, the vendor simply doubles the production rate to meet the demand of buyer. The vendor's demand during non-shortage period follows a constant rate but, the demand is a quadratic decreasing function of time in shortage period. The buyer's demand is a quadratic increasing function ...
A deterministic inventory/production model with general inventory cost rate function and piecewise linear concave production costs Bayındır, Zeynep Pelin; Frenk, J. B. G. (Elsevier BV, 2007-05-16) We present a thorough analysis of the economic production quantity model with shortages under a general inventory cost rate function and piecewise linear concave production costs. Consequently, an effective solution procedure, particularly useful for an approximation scheme, is proposed. A computational study is appended to illustrate the performance of the proposed solution procedure.
The Impact of Modeling on Robust Inventory Management Under Demand Uncertainty Solyali, Oguz; Cordeau, Jean-Francois; Laporte, Gilbert (2016-04-01) This study considers a basic inventory management problem with nonzero fixed order costs under interval demand uncertainty. The existing robust formulations obtained by applying well-known robust optimization methodologies become computationally intractable for large problem instances due to the presence of binary variables. This study resolves this intractability issue by proposing a new robust formulation that is shown to be solvable in polynomial time when the initial inventory is zero or negative. Becau...
JOINT PRICING AND REPLENISHMENT DECISIONS FOR NON-INSTANTANEOUS DETERIORATING ITEMS WITH PARTIAL BACKLOGGING, INFLATION- AND SELLING PRICE-DEPENDENT DEMAND AND CUSTOMER RETURNS Ghoreishi, Maryam; Mirzazadeh, Abolfazl; Weber, Gerhard Wilhelm; Nakhai-Kamalabadi, Isa (American Institute of Mathematical Sciences (AIMS), 2015-07-01) This paper develops an Economic Order Quantity (EOQ) model for non-instantaneous deteriorating items with selling price- and inflation-induced demand under the effect of inflation and customer returns. The customer returns are assumed as a function of demand and price. Shortages are allowed and partially backlogged. The effects of time value of money are studied using the Discounted Cash Flow approach. The main objective is to determine the optimal selling price, the optimal length of time in which there is...

Citation Formats

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.