IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v203y2010i3p593-600.html
   My bibliography  Save this article

An optimal production-inventory model for deteriorating items with multiple-market demand

Author

Listed:
  • He, Yong
  • Wang, Shou-Yang
  • Lai, K.K.

Abstract

The global markets of today offer more selling opportunities to the deteriorating items' manufacturers, but also pose new challenges in production and inventory planning. From a production management standpoint, opportunities to exploit the difference in the timing of the selling season between geographically dispersed markets for deteriorating items are important to improving a firm's profitability. In this paper, we examined the above issue with an insightful production-inventory model of a deteriorating items manufacturer selling goods to multiple-markets with different selling seasons. We also provided a solution procedure to find the optimal replenishment schedule for raw materials and the optimal production plan for finished products. A numerical example was then used to illustrate the model and the solution procedure. Finally, sensitivity analysis of the optimal solution with respect to major parameters was carried out.

Suggested Citation

  • He, Yong & Wang, Shou-Yang & Lai, K.K., 2010. "An optimal production-inventory model for deteriorating items with multiple-market demand," European Journal of Operational Research, Elsevier, vol. 203(3), pages 593-600, June.
    • Handle: RePEc:eee:ejores:v:203:y:2010:i:3:p:593-600
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377-2217(09)00565-7
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Panagiotis Kouvelis & Genaro J. Gutierrez, 1997. "The Newsvendor Problem in a Global Market: Optimal Centralized and Decentralized Control Policies for a Two-Market Stochastic Inventory System," Management Science, INFORMS, vol. 43(5), pages 571-585, May.
    2. Chang, Horng-Jinh & Teng, Jinn-Tsair & Ouyang, Liang-Yuh & Dye, Chung-Yuan, 2006. "Retailer's optimal pricing and lot-sizing policies for deteriorating items with partial backlogging," European Journal of Operational Research, Elsevier, vol. 168(1), pages 51-64, January.
    3. 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.
    4. Yang, P. C. & Wee, H. M., 2002. "A single-vendor and multiple-buyers production-inventory policy for a deteriorating item," European Journal of Operational Research, Elsevier, vol. 143(3), pages 570-581, December.
    5. Wu, Kun-Shan & Ouyang, Liang-Yuh & Yang, Chih-Te, 2006. "An optimal replenishment policy for non-instantaneous deteriorating items with stock-dependent demand and partial backlogging," International Journal of Production Economics, Elsevier, vol. 101(2), pages 369-384, June.
    6. Hou, Kuo-Lung, 2006. "An inventory model for deteriorating items with stock-dependent consumption rate and shortages under inflation and time discounting," European Journal of Operational Research, Elsevier, vol. 168(2), pages 463-474, January.
    7. Balkhi, Zaid T. & Benkherouf, Lakdere, 1996. "A production lot size inventory model for deteriorating items and arbitrary production and demand rates," European Journal of Operational Research, Elsevier, vol. 92(2), pages 302-309, July.
    8. Lee, Chun Chen & Hsu, Shu-Lu, 2009. "A two-warehouse production model for deteriorating inventory items with time-dependent demands," European Journal of Operational Research, Elsevier, vol. 194(3), pages 700-710, May.
    9. Goyal, S. K. & Giri, B. C., 2001. "Recent trends in modeling of deteriorating inventory," European Journal of Operational Research, Elsevier, vol. 134(1), pages 1-16, October.
    10. Rau, Hsin & Wu, Mei-Ying & Wee, Hui-Ming, 2003. "Integrated inventory model for deteriorating items under a multi-echelon supply chain environment," International Journal of Production Economics, Elsevier, vol. 86(2), pages 155-168, November.
    11. Chung, Kun-Jen & Chu, Peter & Lan, Shaw-Ping, 2000. "A note on EOQ models for deteriorating items under stock dependent selling rate," European Journal of Operational Research, Elsevier, vol. 124(3), pages 550-559, August.
    12. Ouyang, Liang-Yuh & Teng, Jinn-Tsair & Goyal, Suresh Kumar & Yang, Chih-Te, 2009. "An economic order quantity model for deteriorating items with partially permissible delay in payments linked to order quantity," European Journal of Operational Research, Elsevier, vol. 194(2), pages 418-431, April.
    13. Chung, Kun-Jen & Liao, Jui-Jung, 2006. "The optimal ordering policy in a DCF analysis for deteriorating items when trade credit depends on the order quantity," International Journal of Production Economics, Elsevier, vol. 100(1), pages 116-130, March.
    14. Khouja, Moutaz, 2001. "The effect of large order quantities on expected profit in the single-period model," International Journal of Production Economics, Elsevier, vol. 72(3), pages 227-235, August.
    15. Manna, S.K. & Chaudhuri, K.S., 2006. "An EOQ model with ramp type demand rate, time dependent deterioration rate, unit production cost and shortages," European Journal of Operational Research, Elsevier, vol. 171(2), pages 557-566, June.
    16. Giri, B. C. & Pal, S. & Goswami, A. & Chaudhuri, K. S., 1996. "An inventory model for deteriorating items with stock-dependent demand rate," European Journal of Operational Research, Elsevier, vol. 95(3), pages 604-610, December.
    17. Giri, B.C. & Chaudhuri, K.S., 1998. "Deterministic models of perishable inventory with stock-dependent demand rate and nonlinear holding cost," European Journal of Operational Research, Elsevier, vol. 105(3), pages 467-474, March.
    18. Rong, M. & Mahapatra, N.K. & Maiti, M., 2008. "A two warehouse inventory model for a deteriorating item with partially/fully backlogged shortage and fuzzy lead time," European Journal of Operational Research, Elsevier, vol. 189(1), pages 59-75, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yu, Yugang & Wang, Zheng & Liang, Liang, 2012. "A vendor managed inventory supply chain with deteriorating raw materials and products," International Journal of Production Economics, Elsevier, vol. 136(2), pages 266-274.
    2. Niu, Baozhuang & Chen, Lingyun & Wang, Jingmai, 2022. "Ad valorem tariff vs. specific tariff: Quality-differentiated e-tailers’ profitability and social welfare in cross-border e-commerce," Omega, Elsevier, vol. 108(C).
    3. Nidhi Handa & S. R. Singh & Neha Punetha, 2022. "Impact of carbon emission in two-echelon supply chain inventory decision with controllable deterioration and two-level trade-credit period," OPSEARCH, Springer;Operational Research Society of India, vol. 59(4), pages 1555-1586, December.
    4. Pal, Brojeswar & Sana, Shib Sankar & Chaudhuri, Kripasindhu, 2012. "A multi-echelon supply chain model for reworkable items in multiple-markets with supply disruption," Economic Modelling, Elsevier, vol. 29(5), pages 1891-1898.
    5. Bakker, Monique & Riezebos, Jan & Teunter, Ruud H., 2012. "Review of inventory systems with deterioration since 2001," European Journal of Operational Research, Elsevier, vol. 221(2), pages 275-284.
    6. Dharamender Singh & Anurag Jayswal & Majed G. Alharbi & Ali Akbar Shaikh, 2021. "An Investigation of a Supply Chain Model for Co-Ordination of Finished Products and Raw Materials in a Production System under Different Situations," Sustainability, MDPI, vol. 13(22), pages 1-25, November.
    7. Xiao, Tiaojun & Xu, Tiantian, 2013. "Coordinating price and service level decisions for a supply chain with deteriorating item under vendor managed inventory," International Journal of Production Economics, Elsevier, vol. 145(2), pages 743-752.
    8. Huang, Yeu-Shiang & Su, Wei-Jun & Lin, Zu-Liang, 2011. "A study on lead-time discount coordination for deteriorating products," European Journal of Operational Research, Elsevier, vol. 215(2), pages 358-366, December.
    9. Chung, Chun-Jen & Wee, Hui-Ming, 2011. "Short life-cycle deteriorating product remanufacturing in a green supply chain inventory control system," International Journal of Production Economics, Elsevier, vol. 129(1), pages 195-203, January.
    10. 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.
    11. Ali Salmasnia & Ali Talesh-Kazemi & Mohammad Reza Maleki, 2022. "Joint optimization of inventory planning, maintenance policy and pricing for perishable complementary products by considering the product freshness and technology level," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 49(4), pages 713-746, December.
    12. Narayan Singh & Bindu Vaish & Shiv Ray Singh, 2014. "A collaborative strategy for a three echelon supply chain with ramp type demand, deterioration and inflation," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 24(3), pages 77-100.
    13. Ali Salmasnia & Ali Talesh-Kazemi, 2022. "Integrating inventory planning, pricing and maintenance for perishable products in a two-component parallel manufacturing system with common cause failures," Operational Research, Springer, vol. 22(2), pages 1235-1265, April.
    14. 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.
    15. K. Skouri & I. Konstantaras & S. Manna & K. Chaudhuri, 2011. "Inventory models with ramp type demand rate, time dependent deterioration rate, unit production cost and shortages," Annals of Operations Research, Springer, vol. 191(1), pages 73-95, November.
    16. Majumder, P. & Bera, U.K. & Maiti, M., 2016. "An EPQ model for two-warehouse in unremitting release pattern with two-level trade credit period concerning both supplier and retailer," Applied Mathematics and Computation, Elsevier, vol. 274(C), pages 430-458.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bakker, Monique & Riezebos, Jan & Teunter, Ruud H., 2012. "Review of inventory systems with deterioration since 2001," European Journal of Operational Research, Elsevier, vol. 221(2), pages 275-284.
    2. 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.
    3. Yan, Changyuan & Banerjee, Avijit & Yang, Liangbin, 2011. "An integrated production-distribution model for a deteriorating inventory item," International Journal of Production Economics, Elsevier, vol. 133(1), pages 228-232, September.
    4. Majumder, P. & Bera, U.K. & Maiti, M., 2016. "An EPQ model for two-warehouse in unremitting release pattern with two-level trade credit period concerning both supplier and retailer," Applied Mathematics and Computation, Elsevier, vol. 274(C), pages 430-458.
    5. Tiwari, Sunil & Cárdenas-Barrón, Leopoldo Eduardo & Khanna, Aditi & Jaggi, Chandra K., 2016. "Impact of trade credit and inflation on retailer's ordering policies for non-instantaneous deteriorating items in a two-warehouse environment," International Journal of Production Economics, Elsevier, vol. 176(C), pages 154-169.
    6. R. Udayakumar & K. V. Geetha, 2017. "Economic ordering policy for single item inventory model over finite time horizon," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 8(2), pages 734-757, November.
    7. Ghiami, Yousef & Beullens, Patrick, 2016. "Planning for shortages? Net Present Value analysis for a deteriorating item with partial backlogging," International Journal of Production Economics, Elsevier, vol. 178(C), pages 1-11.
    8. Goyal, S. K. & Giri, B. C., 2001. "Recent trends in modeling of deteriorating inventory," European Journal of Operational Research, Elsevier, vol. 134(1), pages 1-16, October.
    9. Chandra K. Jaggi & Sunil Tiwari & Satish K. Goel, 2017. "Credit financing in economic ordering policies for non-instantaneous deteriorating items with price dependent demand and two storage facilities," Annals of Operations Research, Springer, vol. 248(1), pages 253-280, January.
    10. Sarkar, Biswajit & Sarkar, Sumon, 2013. "Variable deterioration and demand—An inventory model," Economic Modelling, Elsevier, vol. 31(C), pages 548-556.
    11. Hou, Kuo-Lung, 2006. "An inventory model for deteriorating items with stock-dependent consumption rate and shortages under inflation and time discounting," European Journal of Operational Research, Elsevier, vol. 168(2), pages 463-474, January.
    12. 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.
    13. Pal, Brojeswar & Sana, Shib Sankar & Chaudhuri, Kripasindhu, 2012. "A multi-echelon supply chain model for reworkable items in multiple-markets with supply disruption," Economic Modelling, Elsevier, vol. 29(5), pages 1891-1898.
    14. Reza Maihami & Behrooz Karimi & Seyyed Mohammad Taghi Fatemi Ghomi, 2017. "Effect of two-echelon trade credit on pricing-inventory policy of non-instantaneous deteriorating products with probabilistic demand and deterioration functions," Annals of Operations Research, Springer, vol. 257(1), pages 237-273, October.
    15. M. Palanivel & R. Uthayakumar, 2016. "Two-warehouse inventory model for non-instantaneous deteriorating items with partial backlogging and inflation over a finite time horizon," OPSEARCH, Springer;Operational Research Society of India, vol. 53(2), pages 278-302, June.
    16. Ting, Pin-Shou, 2015. "Comments on the EOQ model for deteriorating items with conditional trade credit linked to order quantity in the supply chain management," European Journal of Operational Research, Elsevier, vol. 246(1), pages 108-118.
    17. Tai, Allen H. & Xie, Yue & Ching, Wai-Ki, 2016. "Inspection policy for inventory system with deteriorating products," International Journal of Production Economics, Elsevier, vol. 173(C), pages 22-29.
    18. Lihao Lu & Jianxiong Zhang & Wansheng Tang, 2016. "Optimal dynamic pricing and replenishment policy for perishable items with inventory-level-dependent demand," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(6), pages 1480-1494, April.
    19. Liao, Jui-Jung, 2008. "An EOQ model with noninstantaneous receipt and exponentially deteriorating items under two-level trade credit," International Journal of Production Economics, Elsevier, vol. 113(2), pages 852-861, June.
    20. Shah, Nita H & Soni, Hardik N & Patel, Kamlesh A, 2013. "Optimizing inventory and marketing policy for non-instantaneous deteriorating items with generalized type deterioration and holding cost rates," Omega, Elsevier, vol. 41(2), pages 421-430.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:203:y:2010:i:3:p:593-600. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eor .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.