An inventory model with random discount offerings
AbstractWe consider an inventory model in which a supplier makes deal offers with random discount prices at random points in time. Assuming that discount offerings follow a Poisson process and discount price is a discrete random variable with a known distribution, we propose a continuous-review control policy for the model and derive optimality conditions for the policy parameters. The model is then extended to the case of multiple suppliers that offer discount deals with supplier-specific Poisson processes and discount prices. Numerical examples are presented to demonstrate cost savings due to discount offers.
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Bibliographic InfoArticle provided by Elsevier in its journal Omega.
Volume (Year): 39 (2011)
Issue (Month): 6 (December)
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Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description
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- Kamran Moinzadeh, 1997. "Replenishment and Stocking Policies for Inventory Systems with Random Deal Offerings," Management Science, INFORMS, vol. 43(3), pages 334-342, March.
- Kevin Hsu, Wen-Kai & Yu, Hong-Fwu, 2009. "EOQ model for imperfective items under a one-time-only discount," Omega, Elsevier, vol. 37(5), pages 1018-1026, October.
- Ramasesh, Ranga V., 2010. "Lot-sizing decisions under limited-time price incentives: A review," Omega, Elsevier, vol. 38(3-4), pages 118-135, June.
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