A production-inventory model with stochastic lead time and JIT set up cost

Ruchira Chakrabarty, Tapan Roy and Kripasindhu Chaudhuri

International Journal of Operational Research, 2018, vol. 33, issue 2, 161-178

Abstract: We developed this inventory model under price dependent demand in stochastic environment. Here probabilistic lead time is considered and shortages are allowed (if occur) over a finite time horizon. Generalising the work of Maiti et al. (2009) more precisely, we consider this model with just-in-time set up cost where deterioration is taken into account and backlogging rate has been considered as a negative exponential function of the waiting time. Taking all these into account, mathematical expression for expected average profit is derived. A closed form of analytic solution for maximising the expected average profit function is obtained when demand is constant. Numerical examples are carried out to identify the most sensitive parameter.

Keywords: inventory; stochastic lead time; JIT set up cost; deterioration; partial backlogging; price dependent demand. (search for similar items in EconPapers)
Date: 2018
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