Article ID: | iaor20117817 |
Volume: | 215 |
Issue: | 1 |
Start Page Number: | 97 |
End Page Number: | 104 |
Publication Date: | Nov 2011 |
Journal: | European Journal of Operational Research |
Authors: | Teng Jinn-Tsair, Lou Kuo-Ren, Krommyda Iris-Pandora, Skouri Konstantina |
In a recent paper, presented an inventory model with a stock‐dependent demand under progressive payment scheme, assuming zero ending‐inventory and adopting a cost‐minimization objective. However, with a stock‐dependent demand a non‐zero ending stock may increase profits resulting from the increased demand. This work is motivated by paper extending their model to allow for: (1) a non‐zero ending‐inventory, (2) a profit‐maximization objective, (3) a limited inventory capacity and (4) deteriorating items with a constant deterioration rate. For the resulted model sufficient conditions for the existence and uniqueness of the optimal solution are provided. Finally, several economic interpretations of the theoretical results are also given.