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An EOQ model with price-dependent supply and demand

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  • Melis Teksan, Z.
  • Geunes, Joseph

Abstract

This paper considers a generalization of the Economic Order Quantity (EOQ) model for an end-item that requires an input component for production. The quantity of input components available for production is a nondecreasing function of the price offered by the producer to its suppliers, while the end-item demand is also price-dependent. We analyze the behavior of the optimal replenishment and pricing policy, which depends on the economics of production and procurement costs and the prices associated with input components and end-items. This analysis sheds light on how to deal with price-dependent supply in production planning, as well as on the value of supplier heterogeneity and information on the relationship between component price and supply.

Suggested Citation

  • Melis Teksan, Z. & Geunes, Joseph, 2016. "An EOQ model with price-dependent supply and demand," International Journal of Production Economics, Elsevier, vol. 178(C), pages 22-33.
    • Handle: RePEc:eee:proeco:v:178:y:2016:i:c:p:22-33
    DOI: 10.1016/j.ijpe.2016.04.023
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    References listed on IDEAS

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    3. Heibatolah Sadeghi & Hêriş Golpîra & Faicel Hnaien & Cosimo Magazzino, 2023. "Pricing-inventory model with discrete demand and delivery orders," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 33(3), pages 119-139.

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