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Deterministic inventory lot‐size models under inflation with shortages and deterioration for fluctuating demand

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  • Hui‐Ling Yang
  • Jinn‐Tsair Teng
  • Maw‐Sheng Chern

Abstract

In this paper, we extend the inventory lot‐size models to allow for inflation and fluctuating demand (which is more general than constant, increasing, decreasing, and log‐concave demand patterns). We prove that the optimal replenishment schedule not only exists but is also unique. Furthermore, we show that the total cost associated with the inventory system is a convex function of the number of replenishments. Hence, the search for the optimal number of replenishments is simplified to finding a local minimum. Finally, several numerical examples are provided to illustrate the results. © 2001 John Wiley & Sons, Inc. Naval Research Logistics 48: 144–158, 2001

Suggested Citation

  • Hui‐Ling Yang & Jinn‐Tsair Teng & Maw‐Sheng Chern, 2001. "Deterministic inventory lot‐size models under inflation with shortages and deterioration for fluctuating demand," Naval Research Logistics (NRL), John Wiley & Sons, vol. 48(2), pages 144-158, March.
    • Handle: RePEc:wly:navres:v:48:y:2001:i:2:p:144-158
    DOI: 10.1002/1520-6750(200103)48:23.0.CO;2-8
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    References listed on IDEAS

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    1. Ray, J. & Chaudhuri, K. S., 1997. "An EOQ model with stock-dependent demand, shortage, inflation and time discounting," International Journal of Production Economics, Elsevier, vol. 53(2), pages 171-180, November.
    2. Hariga, Moncer A., 1995. "Effects of inflation and time-value of money on an inventory model with time-dependent demand rate and shortages," European Journal of Operational Research, Elsevier, vol. 81(3), pages 512-520, March.
    3. Lineu C. Barbosa & Moshe Friedman, 1978. "Deterministic Inventory Lot Size Models--A General Root Law," Management Science, INFORMS, vol. 24(8), pages 819-826, April.
    4. Jinn‐Tsair Teng & Maw‐Sheng Chern & Hui‐Ling Yang, 1997. "An optimal recursive method for various inventory replenishment models with increasing demand and shortages," Naval Research Logistics (NRL), John Wiley & Sons, vol. 44(8), pages 791-806, December.
    5. Upendra Dave, 1989. "A deterministic lot‐size inventory model with shortages and a linear trend in demand," Naval Research Logistics (NRL), John Wiley & Sons, vol. 36(4), pages 507-514, August.
    6. Ram B. Misra, 1979. "A note on optimal inventory management under inflation," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 26(1), pages 161-165, March.
    7. Datta, T. K. & Pal, A. K., 1991. "Effects of inflation and time-value of money on an inventory model with linear time-dependent demand rate and shortages," European Journal of Operational Research, Elsevier, vol. 52(3), pages 326-333, June.
    8. Ram Rachamadugu & Ranga Ramasesh, 1994. "Suboptimality of equal lot sizes for finite‐horizon problems," Naval Research Logistics (NRL), John Wiley & Sons, vol. 41(7), pages 1019-1027, December.
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    Cited by:

    1. Hongjun Peng & Tao Pang & Fuliang Cao & Juan Zhao, 2018. "A Mutual Subsidy Mechanism for a Seasonal Product Supply Chain Channel Under Double Price Regulation," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 35(06), pages 1-26, December.
    2. K. Skouri & I. Konstantaras & S. Manna & K. Chaudhuri, 2011. "Inventory models with ramp type demand rate, time dependent deterioration rate, unit production cost and shortages," Annals of Operations Research, Springer, vol. 191(1), pages 73-95, November.

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