The economic production and pricing model with lot-size-dependent production cost
In this paper, the economic production quantity problem for a single-product single-machine system is extended. It is assumed that annual demand of the product is a function of price set by manufacturer. This extension considers sales revenue, inventory and setup costs as well as a variable cost of production which is a function of the lot size. Several linear and non-linear functions of demand and variable cost are considered in this paper and a global solution methodology is presented for the models developed. Newton’s method is used to find local optima and asymptotic convergence of the solution algorithm to a global optimum is proved. Numerical studies followed by a discussion provide additional insights into the problem. Copyright Springer Science+Business Media, LLC. 2012
Volume (Year): 54 (2012)
Issue (Month): 1 (September)
|Contact details of provider:|| Web page: http://www.springer.com/business/operations+research/journal/10898|
|Order Information:||Web: http://link.springer.de/orders.htm|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wee, Hui-Ming, 1995. "Joint pricing and replenishment policy for deteriorating inventory with declining market," International Journal of Production Economics, Elsevier, vol. 40(2-3), pages 163-171, August.
- Kunreuther, H. & Richard, J.-F., .
"Optimal pricing and inventory decisions for non-seasonal items,"
CORE Discussion Papers RP
-77, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Kunreuther, Howard & Richard, Jean Francois, 1971. "Optimal Pricing and Inventory Decisions for Non-Seasonal Items," Econometrica, Econometric Society, vol. 39(1), pages 173-75, January.
- Chao, Xiuli & Chen, Hong & Zheng, Shaohui, 2008. "Joint replenishment and pricing decisions in inventory systems with stochastically dependent supply capacity," European Journal of Operational Research, Elsevier, vol. 191(1), pages 142-155, November.
- T. M. Whitin, 1955. "Inventory Control and Price Theory," Management Science, INFORMS, vol. 2(1), pages 61-68, October.
- Inderfurth, Karl, 2004. "Optimal policies in hybrid manufacturing/remanufacturing systems with product substitution," International Journal of Production Economics, Elsevier, vol. 90(3), pages 325-343, August.
- Ardalan, Alireza, 1995. "A comparative analysis of approaches for determining optimal price and order quantity when a sale increases demand," European Journal of Operational Research, Elsevier, vol. 84(2), pages 416-430, July.
When requesting a correction, please mention this item's handle: RePEc:spr:jglopt:v:54:y:2012:i:1:p:1-15. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.