A COMPARISON AMONG VARIOUS INVENTORY SHORTAGE MODELS FOR DETERIORATING ITEMS ON THE BASIS OF MAXIMIZING PROFIT

Maw-Sheng Chern (), Ya-Lan Chan () and Jinn-Tsair Teng ()
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Maw-Sheng Chern: Department of Industrial Engineering and Engineering Management, National Tsing Hua University, Hsinchu 30043, Taiwan, ROC
Jinn-Tsair Teng: Department of Marketing and Management Sciences, The William Paterson University of New Jersey, Wayne, NJ 07470, USA

Asia-Pacific Journal of Operational Research (APJOR), 2005, vol. 22, issue 01, 121-134

Abstract: For a finite planning horizon, there has been a considerable body of research papers in the area of operations management that dealt with four different inventory shortage models in the last two decades. In this paper, we establish the models to reflect the fact that the longer the waiting time, the smaller the backlogging rate. We then use maximizing profit as the objective to make an appropriate comparison among those four alternatives. The theoretical results reveal that Model 4 provides the highest profit only if the profit margin is sufficiently low. Otherwise, in general, Model 3 has the highest profit among them.

Keywords: Inventory; modeling; shortages; partial backlogging (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (9)

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DOI: 10.1142/S0217595905000455

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