Article ID: | iaor1996406 |
Country: | Belgium |
Volume: | 35 |
Start Page Number: | 227 |
End Page Number: | 231 |
Publication Date: | Jun 1993 |
Journal: | Cahiers du Centre d'tudes de Recherche Oprationnelle |
Authors: | Shah Y.K., Shah Nita H. |
Keywords: | economic order |
An inventory model for exponentially decaying inventory when supplier announces a temporary price discount for a short time period is considered. Units purchased during the specified time period are available at a special discount price and units purchased before or after the period will be available at the current price which is higher than the special discount price. In any case it is assumed that selling price of the units remains fixed. The problem is to determine an extra large quantity to be procured during the time period in which a special discount is available. This is one time decision problem. Appropriate formulae have been obtained to determine the large quantity to be purchased, before the price becomes original. The model is illustrated with a numerical example.