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An extension of inventory models with discretely variable holding costs

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  • Urban, Timothy L.

Abstract

In a recent paper, Alfares [2007. Inventory model with stock-level dependent demand rate and variable holding cost. International Journal of Production Economics, 108 (1-2), 259-265] presented an inventory model with a stock-dependent demand rate and variable holding costs. The analysis imposed a terminal condition that the inventory level at the end of the order cycle drop to zero and utilized a cost-minimization objective. However, with a stock-dependent demand rate, this approach does not provide an optimal profit. Allowing ending inventory to be nonzero, a profit-maximization model and solution methodology are developed. Computational results indicate a substantial improvement in the solution realized by the proposed approach.

Suggested Citation

  • Urban, Timothy L., 2008. "An extension of inventory models with discretely variable holding costs," International Journal of Production Economics, Elsevier, vol. 114(1), pages 399-403, July.
    • Handle: RePEc:eee:proeco:v:114:y:2008:i:1:p:399-403
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    References listed on IDEAS

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    1. Weiss, Howard J., 1982. "Economic order quantity models with nonlinear holding costs," European Journal of Operational Research, Elsevier, vol. 9(1), pages 56-60, January.
    2. Goh, M., 1994. "EOQ models with general demand and holding cost functions," European Journal of Operational Research, Elsevier, vol. 73(1), pages 50-54, February.
    3. 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.
    4. Alfares, Hesham K., 2007. "Inventory model with stock-level dependent demand rate and variable holding cost," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 259-265, July.
    5. Ferguson, Mark & Jayaraman, Vaidy & Souza, Gilvan C., 2007. "Note: An application of the EOQ model with nonlinear holding cost to inventory management of perishables," European Journal of Operational Research, Elsevier, vol. 180(1), pages 485-490, July.
    6. Chun-Tao Chang, 2004. "Inventory Models With Stock-Dependent Demand And Nonlinear Holding Costs For Deteriorating Items," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 21(04), pages 435-446.
    7. Urban, Timothy L., 2005. "Inventory models with inventory-level-dependent demand: A comprehensive review and unifying theory," European Journal of Operational Research, Elsevier, vol. 162(3), pages 792-804, May.
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    1. San-José, L.A. & Sicilia, J. & García-Laguna, J., 2015. "Analysis of an EOQ inventory model with partial backordering and non-linear unit holding cost," Omega, Elsevier, vol. 54(C), pages 147-157.
    2. Pando, Valentín & San-José, Luis A. & García-Laguna, Juan & Sicilia, Joaquín, 2013. "An economic lot-size model with non-linear holding cost hinging on time and quantity," International Journal of Production Economics, Elsevier, vol. 145(1), pages 294-303.
    3. Guchhait, Partha & Kumar Maiti, Manas & Maiti, Manoranjan, 2013. "Production-inventory models for a damageable item with variable demands and inventory costs in an imperfect production process," International Journal of Production Economics, Elsevier, vol. 144(1), pages 180-188.
    4. Zeinab Sazvar & Mohammad Reza Akbari Jokar & Armand Baboli, 2014. "A new order splitting model with stochastic lead times for deterioration items," International Journal of Systems Science, Taylor & Francis Journals, vol. 45(9), pages 1936-1954, September.
    5. Dobson, Gregory & Pinker, Edieal J. & Yildiz, Ozlem, 2017. "An EOQ model for perishable goods with age-dependent demand rate," European Journal of Operational Research, Elsevier, vol. 257(1), pages 84-88.

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