A Deterministic Inventory/Production Model with General Inventory Cost Rate Function and Concave Production Costs

Ilker Birbil, Hans Frenk and Pelin Bayindir

Econometric Institute Research Papers from Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute

Abstract: We present a thorough analysis of the economic order quantity model with shortages under a general inventory cost rate function and concave production costs. By using some standard results from convex analysis, we show that the model exhibits a composite concave-convex structure. Consequently, an effective solution procedure, particularly useful for an approximation scheme, is proposed. A computational study is appended to illustrate the performance of the proposed solution procedure.

Keywords: Inventory; concave production cost; concave-convex programming; general inventory cost function (search for similar items in EconPapers)
JEL-codes: C6 M M11 R4 (search for similar items in EconPapers)
Date: 2004-08-30
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Citations: View citations in EconPapers (1)

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