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An inventory system with demand dependent on both time and price assuming backlogged shortages

Author

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  • San-José, Luis A.
  • Sicilia, Joaquín
  • Alcaide-López-de-Pablo, David

Abstract

In this work we analyze an inventory model for items whose demand is a bivariate function of price and time. It is supposed that the demand rate multiplicatively combines the effects of a time-power function and a price-logit function. The aim is to maximize the profit per time unit, assuming that the inventory cost per time unit is the sum of the holding, shortage, ordering and purchasing costs. An algorithm is developed to find the optimal price, the optimal lot size and the optimal replenishment cycle. Several numerical examples are introduced to illustrate the solution procedure.

Suggested Citation

  • San-José, Luis A. & Sicilia, Joaquín & Alcaide-López-de-Pablo, David, 2018. "An inventory system with demand dependent on both time and price assuming backlogged shortages," European Journal of Operational Research, Elsevier, vol. 270(3), pages 889-897.
    • Handle: RePEc:eee:ejores:v:270:y:2018:i:3:p:889-897
    DOI: 10.1016/j.ejor.2017.10.042
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    Citations

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    Cited by:

    1. Hauck, Zsuzsanna & Rabta, Boualem & Reiner, Gerald, 2021. "Joint quality and pricing decisions in lot sizing models with defective items," International Journal of Production Economics, Elsevier, vol. 241(C).
    2. Cynthia Griselle De-la-Cruz-Márquez & Leopoldo Eduardo Cárdenas-Barrón & J. David Porter & Imelda de Jesús Loera-Hernández & Neale R. Smith & Armando Céspedes-Mota & Gerardo Treviño-Garza & Rafael Ern, 2023. "An Inventory Model for Growing Items When the Demand Is Price Sensitive with Imperfect Quality, Inspection Errors, Carbon Emissions, and Planned Backorders," Mathematics, MDPI, vol. 11(21), pages 1-45, October.
    3. Terzi, Mourad & Ouazene, Yassine & Yalaoui, Alice & Yalaoui, Farouk, 2023. "Lot-sizing and pricing decisions under attraction demand models and multi-channel environment: New efficient formulations," Operations Research Perspectives, Elsevier, vol. 10(C).
    4. Luis A. San-José & Joaquín Sicilia & Manuel González-de-la-Rosa & Jaime Febles-Acosta, 2022. "Profit maximization in an inventory system with time-varying demand, partial backordering and discrete inventory cycle," Annals of Operations Research, Springer, vol. 316(2), pages 763-783, September.
    5. Su, Rung-Hung & Weng, Ming-Wei & Yang, Chih-Te, 2021. "Effects of corporate social responsibility activities in a two-stage assembly production system with multiple components and imperfect processes," European Journal of Operational Research, Elsevier, vol. 293(2), pages 469-480.
    6. Chernonog, Tatyana, 2020. "Inventory and marketing policy in a supply chain of a perishable product," International Journal of Production Economics, Elsevier, vol. 219(C), pages 259-274.

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