Partial backlogging inventory lot-size models for deteriorating items with fluctuating demand under inflation

Chern, Maw-Sheng, Yang, Hui-Ling, Teng, Jinn-Tsair and Sotiris Papachristos

European Journal of Operational Research, 2008, vol. 191, issue 1, pages 127-141

Abstract: In this paper, the traditional inventory lot-size model is extended to allow not only for general partial backlogging rate but also for inflation. The assumptions of equal cycle length and constant shortage length imposed in the model developed by Moon et al. [Moon, I., Giri, B.C., Ko, B., 2005. Economic order quantity models for ameliorating/deteriorating items under inflation and time discounting, European Journal of Operational Research 162(3), 773-785] are also relaxed. For any given number of replenishment cycles the existence of a unique optimal replenishment schedule is proved and further the convexity of the total cost function of the inventory system in the number of replenishments is established. The theoretical results here amend those in Yang et al. [Yang, H.L., Teng, J.T., Chern, M.S., 2001. Deterministic inventory lot-size models under inflation with shortages and deterioration for fluctuating demand, Naval Research Logistics 48(2), 144-158] and provide the solution to those two counterexamples by Skouri and Papachristos [Skouri, K., Papachristos, S., 2002. Note on "deterministic inventory lot-size models under inflation with shortages and deterioration for fluctuating demand" by Yang et al. Naval Research Logistics 49(5), 527-529.]. Finally we propose an algorithm to find the solution, and obtain some managerial results by using sensitivity analyses.

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European Journal of Operational Research is edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

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