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Inventory Model with Fixed Shelf Life under Generalized Non-Increasing Demand

Author

Listed:
  • Han-Wen Tuan

    (Department of Multimedia Game Development and Application, Hungkuang University, Taichung City 43302, Taiwan)

  • Kuo-Chen Hung

    (Department of Multimedia Game Development and Application, Hungkuang University, Taichung City 43302, Taiwan)

  • Gino K. Yang

    (Department of Multimedia Game Development and Application, Hungkuang University, Taichung City 43302, Taiwan)

Abstract

In this paper, we develop an economic order quantity (EOQ) model for fixed shelf-life items and a non-increasing demand. The objective of this model is to maximize the total profit. We find the criterion to decide (i) the interior maximum solution or (ii) the boundary maximum solution. Eight numerical examples are given to illustrate all possible scenarios of this generalized model. Our results identify a scenario for which the maximum profit is always negative. This is highly relevant for firms in the public sector operating at a financial loss.

Suggested Citation

  • Han-Wen Tuan & Kuo-Chen Hung & Gino K. Yang, 2021. "Inventory Model with Fixed Shelf Life under Generalized Non-Increasing Demand," Mathematics, MDPI, vol. 9(21), pages 1-15, October.
    • Handle: RePEc:gam:jmathe:v:9:y:2021:i:21:p:2735-:d:666718
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    References listed on IDEAS

    as
    1. Tal Avinadav & Tatyana Chernonog & Yael Lahav & Uriel Spiegel, 2017. "Dynamic pricing and promotion expenditures in an EOQ model of perishable products," Annals of Operations Research, Springer, vol. 248(1), pages 75-91, January.
    2. 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.
    3. Avinadav, Tal & Herbon, Avi & Spiegel, Uriel, 2013. "Optimal inventory policy for a perishable item with demand function sensitive to price and time," International Journal of Production Economics, Elsevier, vol. 144(2), pages 497-506.
    4. Hanna Górska-Warsewicz & Sylwia Żakowska-Biemans & Dagmara Stangierska & Monika Świątkowska & Agnieszka Bobola & Julita Szlachciuk & Maksymilian Czeczotko & Karol Krajewski & Ewa Świstak, 2021. "Factors Limiting the Development of the Organic Food Sector—Perspective of Processors, Distributors, and Retailers," Agriculture, MDPI, vol. 11(9), pages 1-22, September.
    5. Jennifer Lin & Henry C. J. Chao & Peterson Julian, 2013. "Planning Horizon for Production Inventory Models with Production Rate Dependent on Demand and Inventory Level," Journal of Applied Mathematics, Hindawi, vol. 2013, pages 1-9, March.
    6. Muriana, Cinzia, 2016. "An EOQ model for perishable products with fixed shelf life under stochastic demand conditions," European Journal of Operational Research, Elsevier, vol. 255(2), pages 388-396.
    7. Biswajit Sarkar & Waqas Ahmed & Seok-Beom Choi & Muhammad Tayyab, 2018. "Sustainable Inventory Management for Environmental Impact through Partial Backordering and Multi-Trade-Credit-Period," Sustainability, MDPI, vol. 10(12), pages 1-28, December.
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    9. Cinzia Muriana, 2020. "Inventory management policy for perishable products with Weibull deterioration and constrained recovery assumption based on the residual life," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 39(4), pages 516-538.
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    12. Tal Avinadav, 2016. "Stochastic Periodic-Review Models with Duration- and Quantity-Dependent Inventory Costs: Properties and Approximations," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 33(04), pages 1-25, August.
    13. Avinadav, Tal, 2020. "The effect of decision rights allocation on a supply chain of perishable products under a revenue-sharing contract," International Journal of Production Economics, Elsevier, vol. 225(C).
    14. Karla Zimpel-Leal & Fiona Lettice, 2021. "Generative Mechanisms for Scientific Knowledge Transfer in the Food Industry," Sustainability, MDPI, vol. 13(2), pages 1-23, January.
    15. Avinadav, Tal & Herbon, Avi & Spiegel, Uriel, 2014. "Optimal ordering and pricing policy for demand functions that are separable into price and inventory age," International Journal of Production Economics, Elsevier, vol. 155(C), pages 406-417.
    16. Zon-Yau Lee & Mei-Tai Chu & Yu-Ting Wang & Kuan-Ju Chen, 2020. "Industry Performance Appraisal Using Improved MCDM for Next Generation of Taiwan," Sustainability, MDPI, vol. 12(13), pages 1-18, June.
    17. Chernonog, Tatyana & Avinadav, Tal, 2019. "Pricing and advertising in a supply chain of perishable products under asymmetric information," International Journal of Production Economics, Elsevier, vol. 209(C), pages 249-264.
    18. Gabi Hanukov & Tal Avinadav & Tatyana Chernonog & Uri Yechiali, 2021. "A multi-server system with inventory of preliminary services and stock-dependent demand," International Journal of Production Research, Taylor & Francis Journals, vol. 59(14), pages 4384-4402, July.
    19. Tal Avinadav & Teijo Arponen, 2009. "An Eoq Model For Items With A Fixed Shelf-Life And A Declining Demand Rate Based On Time-To-Expiry Technical Note," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 26(06), pages 759-767.
    20. Olga Orynycz & Karol Tucki & Miron Prystasz, 2020. "Implementation of Lean Management as a Tool for Decrease of Energy Consumption and CO 2 Emissions in the Fast Food Restaurant," Energies, MDPI, vol. 13(5), pages 1-26, March.
    21. Hanukov, Gabi & Avinadav, Tal & Chernonog, Tatyana & Yechiali, Uri, 2020. "A service system with perishable products where customers are either fastidious or strategic," International Journal of Production Economics, Elsevier, vol. 228(C).
    22. Hanukov, Gabi & Avinadav, Tal & Chernonog, Tatyana & Yechiali, Uri, 2019. "Performance improvement of a service system via stocking perishable preliminary services," European Journal of Operational Research, Elsevier, vol. 274(3), pages 1000-1011.
    23. Seema Sharma & Sanjay Singh & S.R. Singh, 2018. "An inventory model for deteriorating items with expiry date and time varying holding cost," International Journal of Procurement Management, Inderscience Enterprises Ltd, vol. 11(5), pages 650-666.
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    Cited by:

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