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A Comparison Among Various Inventory Shortage Models For Deteriorating Items On The Basis Of Maximizing Profit

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  • MAW-SHENG CHERN

    (Department of Industrial Engineering and Engineering Management, National Tsing Hua University, Hsinchu 30043, Taiwan, ROC)

  • YA-LAN CHAN

    (Department of Industrial Engineering and Engineering Management, National Tsing Hua University, Hsinchu 30043, Taiwan, ROC)

  • JINN-TSAIR TENG

    (Department of Marketing and Management Sciences, The William Paterson University of New Jersey, Wayne, NJ 07470, USA)

Abstract

For a finite planning horizon, there has been a considerable body of research papers in the area of operations management that dealt with four different inventory shortage models in the last two decades. In this paper, we establish the models to reflect the fact that the longer the waiting time, the smaller the backlogging rate. We then use maximizing profit as the objective to make an appropriate comparison among those four alternatives. The theoretical results reveal that Model 4 provides the highest profit only if the profit margin is sufficiently low. Otherwise, in general, Model 3 has the highest profit among them.

Suggested Citation

  • Maw-Sheng Chern & Ya-Lan Chan & Jinn-Tsair Teng, 2005. "A Comparison Among Various Inventory Shortage Models For Deteriorating Items On The Basis Of Maximizing Profit," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 22(01), pages 121-134.
    • Handle: RePEc:wsi:apjorx:v:22:y:2005:i:01:n:s0217595905000455
    DOI: 10.1142/S0217595905000455
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    References listed on IDEAS

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    1. Richard Bellman, 1957. "On a Dynamic Programming Approach to the Caterer Problem--I," Management Science, INFORMS, vol. 3(3), pages 270-278, April.
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    1. Yang, Hui-Ling & Teng, Jinn-Tsair & Chern, Maw-Sheng, 2010. "An inventory model under inflation for deteriorating items with stock-dependent consumption rate and partial backlogging shortages," International Journal of Production Economics, Elsevier, vol. 123(1), pages 8-19, January.
    2. Joaquín Sicilia & Luis San-José & Juan García-Laguna, 2012. "An inventory model where backordered demand ratio is exponentially decreasing with the waiting time," Annals of Operations Research, Springer, vol. 199(1), pages 137-155, October.
    3. Wu, Jiang & Chang, Chun-Tao & Teng, Jinn-Tsair & Lai, Kuei-Kuei, 2017. "Optimal order quantity and selling price over a product life cycle with deterioration rate linked to expiration date," International Journal of Production Economics, Elsevier, vol. 193(C), pages 343-351.
    4. Manish Shukla & Sanjay Jharkharia, 2014. "An inventory model for continuously deteriorating agri-fresh produce: an artificial immune system-based solution approach," International Journal of Integrated Supply Management, Inderscience Enterprises Ltd, vol. 9(1/2), pages 110-135.
    5. San-José, Luis A. & Sicilia, Joaquín & García-Laguna, Juan, 2014. "Optimal lot size for a production–inventory system with partial backlogging and mixture of dispatching policies," International Journal of Production Economics, Elsevier, vol. 155(C), pages 194-203.
    6. Chern, Maw-Sheng & Yang, Hui-Ling & Teng, Jinn-Tsair & Papachristos, Sotiris, 2008. "Partial backlogging inventory lot-size models for deteriorating items with fluctuating demand under inflation," European Journal of Operational Research, Elsevier, vol. 191(1), pages 127-141, November.
    7. Sadia Samar Ali & Haripriya Barman & Rajbir Kaur & Hana Tomaskova & Sankar Kumar Roy, 2021. "Multi-Product Multi Echelon Measurements of Perishable Supply Chain: Fuzzy Non-Linear Programming Approach," Mathematics, MDPI, vol. 9(17), pages 1-27, August.
    8. Pahl, Julia & Voß, Stefan, 2014. "Integrating deterioration and lifetime constraints in production and supply chain planning: A survey," European Journal of Operational Research, Elsevier, vol. 238(3), pages 654-674.
    9. Pentico, David W. & Drake, Matthew J., 2011. "A survey of deterministic models for the EOQ and EPQ with partial backordering," European Journal of Operational Research, Elsevier, vol. 214(2), pages 179-198, October.

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