Inventory models with stock-dependent demand and nonlinear holding costs for deteriorating items

Inventory models with stock-dependent demand and nonlinear holding costs for deteriorating items

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Article ID: iaor20071075
Country: Singapore
Volume: 21
Issue: 4
Start Page Number: 435
End Page Number: 446
Publication Date: Dec 2004
Journal: Asia-Pacific Journal of Operational Research
Authors:
Keywords: deteriorating items, lot sizing
Abstract:

In this paper, we discuss why it is appropriate to maximize the profits, instead of minimizing the costs, in an inventory system with an inventory-level-dependent demand rate. In addition, we restate Urban's viewpoint that the restriction of zero ending-inventory is not necessary in an inventory-level-dependent demand model. Consequently, we amend Giri and Chaudhuri's inventory model for deteriorating items by changing the objective to maximize the profits and relaxing the restriction of zero ending-inventory. Finally, we provide a couple of examples to show that both the order quantity and the profit obtained from our proposed model are significantly larger than those in Giri and Chaudhuri's model, in which the objective is to minimize the costs.

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