INVENTORY MODELS WITH STOCK-DEPENDENT DEMAND AND NONLINEAR HOLDING COSTS FOR DETERIORATING ITEMS

Chun-Tao Chang ()
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Chun-Tao Chang: Department of Statistics, Tamkang University, Tamsui, Taipei, Taiwan 25137, R.O.C.

Asia-Pacific Journal of Operational Research (APJOR), 2004, vol. 21, issue 04, 435-446

Abstract: In this paper, we discuss why it is appropriate maximize the profits, instead of minimizing the costs, in an inventory system with an inventory-level-dependent demand rate. In addition, we restate Urban's viewpoint that the restriction of zero ending-inventory is not necessary in an inventory-level-dependent demand model. Consequently, we amend Giri and Chaudhuri's inventory model for deteriorating items by changing the objective to maximize the profits and relaxing the restriction of zero ending-inventory. Finally, we provide a couple of examples to show that both the order quantity and the profit obtained from our proposed model are significantly larger than those in Giri and Chaudhuri's model, in which the objective is to minimize the costs.

Keywords: Inventory; lot sizing; stock-dependent demand; deterioration (search for similar items in EconPapers)
Date: 2004
References: View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:wsi:apjorx:v:21:y:2004:i:04:n:s0217595904000321

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DOI: 10.1142/S0217595904000321

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