Article ID: | iaor20125547 |
Volume: | 199 |
Issue: | 1 |
Start Page Number: | 137 |
End Page Number: | 155 |
Publication Date: | Oct 2012 |
Journal: | Annals of Operations Research |
Authors: | Sicilia Joaqun, San-Jos Luis, Garca-Laguna Juan |
Keywords: | demand, combinatorial optimization, queues: applications, simulation: applications |
We analyze an inventory system with a mixture of backorders and lost sales, where the backordered demand rate is an exponential function of time the customers wait before receiving the item. Stockout costs (backorder cost and lost sales cost) include a fixed cost and a cost proportional to the length of the shortage period. A procedure for determining the optimal policy and the maximum inventory profit is presented. This work extends several inventory models of the existing literature.