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An extension of partial backordering EOQ with correlated demand caused by cross-selling considering multiple minor items

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  • Zhang, Ren-Qian

Abstract

Zhang et al. (2011) proposed the partial backordering EOQ with correlated demand caused by cross-selling, where a portion of the sales of a minor item is associated with those of a major item. In this paper, we extend their model to make it more applicable to dealing with the inventory replenishment problem for multiple associated items. We formulate the model as a mixed integer nonlinear programming (MINLP) problem and develop a global optimum search procedure with the fill rate given. We further employ a one-dimensional search on the fill rate to obtain the minimum total inventory cost within a predetermined precision, which enjoys polynomial computational complexity.

Suggested Citation

  • Zhang, Ren-Qian, 2012. "An extension of partial backordering EOQ with correlated demand caused by cross-selling considering multiple minor items," European Journal of Operational Research, Elsevier, vol. 220(3), pages 876-881.
  • Handle: RePEc:eee:ejores:v:220:y:2012:i:3:p:876-881
    DOI: 10.1016/j.ejor.2012.02.015
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    References listed on IDEAS

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    1. 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.
    2. Fred M. Andres & Hamilton Emmons, 1976. "Note--On the Optimal Packaging Frequency of Products Jointly Replenished," Management Science, INFORMS, vol. 22(10), pages 1165-1168, June.
    3. Wildeman, R.E. & Frenk, J.B.G. & Dekker, R., 1997. "An efficient optimal solution method for the joint replenishment problem," European Journal of Operational Research, Elsevier, vol. 99(2), pages 433-444, June.
    4. Pentico, David W. & Drake, Matthew J., 2009. "The deterministic EOQ with partial backordering: A new approach," European Journal of Operational Research, Elsevier, vol. 194(1), pages 102-113, April.
    5. S. K. Goyal, 1974. "Determination of Optimum Packaging Frequency of Items Jointly Replenished," Management Science, INFORMS, vol. 21(4), pages 436-443, December.
    6. Zhang, Ren-qian & Kaku, Ikou & Xiao, Yi-yong, 2011. "Deterministic EOQ with partial backordering and correlated demand caused by cross-selling," European Journal of Operational Research, Elsevier, vol. 210(3), pages 537-551, May.
    7. Porras, Eric & Dekker, Rommert, 2008. "A solution method for the joint replenishment problem with correction factor," International Journal of Production Economics, Elsevier, vol. 113(2), pages 834-851, June.
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    Cited by:

    1. Zhang, Ren-Qian & Zhang, Lan-Kang & Zhou, Wen-Hui & Saigal, Romesh & Wang, Hui-Wen, 2014. "The multi-item newsvendor model with cross-selling and the solution when demand is jointly normally distributed," European Journal of Operational Research, Elsevier, vol. 236(1), pages 147-159.

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