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An optimal replenishment policy for items with inventory-level-dependent demand and fixed lifetime under the LIFO policy

Author

Listed:
  • Y-W Zhou

    (Hefei University of Technology)

  • S-L Yang

    (Hefei University of Technology)

Abstract

In a recent paper, Hwang and Hahn considered inventory replenishment problems for an item with an inventory-level-dependent demand rate and a fixed lifetime. They developed an EQQ model under the situation of considering the first-in–first-out (FIFO) issuing policy. First, this paper reconsiders Hwang and Hann's problem by employing the last-in–first-out (LIFO) issuing policy, which is more practical in the retail industry. An inventory model is developed. Secondly, the concavity of the objective function is proved. Thirdly, this paper presents conditions where the present model has a unique optimal solution and a method for finding the global optimal solution. A simple solution procedure and sensitivity analyses of parameters are also provided.

Suggested Citation

  • Y-W Zhou & S-L Yang, 2003. "An optimal replenishment policy for items with inventory-level-dependent demand and fixed lifetime under the LIFO policy," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 54(6), pages 585-593, June.
    • Handle: RePEc:pal:jorsoc:v:54:y:2003:i:6:d:10.1057_palgrave.jors.2601482
    DOI: 10.1057/palgrave.jors.2601482
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    References listed on IDEAS

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