Analysis of an EOQ inventory model with partial backordering and non-linear unit holding cost

L.A. San-José, J. Sicilia and J. García-Laguna

Omega, 2015, vol. 54, issue C, 147-157

Abstract: In this paper, an economic order quantity inventory model is analyzed, considering that the unit cumulative holding cost has two significant components: a fixed cost which represents the cost of accommodating the item in the warehouse and a variable cost given by a potential function of the length of time over which the item is held in stock. Shortages are allowed and, during the stockout period, only a fraction of demand is partially backordered. The backordering cost includes a fixed cost and a cost linearly dependent on the length of time for which backorder exists. A solution procedure is developed for determining the optimal inventory policy. Moreover, to illustrate the effects of some parameters on the optimal policy and the minimum total inventory cost, a numerical study is developed.

Keywords: Inventory models; Nonlinear holding cost; Partial backordering; Optimization (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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DOI: 10.1016/j.omega.2015.01.007

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