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An inventory system with demand dependent on both time and price assuming backlogged shortages

Author

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  • San-José, Luis A.
  • Sicilia, Joaquín
  • Alcaide-López-de-Pablo, David

Abstract

In this work we analyze an inventory model for items whose demand is a bivariate function of price and time. It is supposed that the demand rate multiplicatively combines the effects of a time-power function and a price-logit function. The aim is to maximize the profit per time unit, assuming that the inventory cost per time unit is the sum of the holding, shortage, ordering and purchasing costs. An algorithm is developed to find the optimal price, the optimal lot size and the optimal replenishment cycle. Several numerical examples are introduced to illustrate the solution procedure.

Suggested Citation

  • San-José, Luis A. & Sicilia, Joaquín & Alcaide-López-de-Pablo, David, 2018. "An inventory system with demand dependent on both time and price assuming backlogged shortages," European Journal of Operational Research, Elsevier, vol. 270(3), pages 889-897.
    • Handle: RePEc:eee:ejores:v:270:y:2018:i:3:p:889-897
    DOI: 10.1016/j.ejor.2017.10.042
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    Citations

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    Cited by:

    1. Hauck, Zsuzsanna & Rabta, Boualem & Reiner, Gerald, 2021. "Joint quality and pricing decisions in lot sizing models with defective items," International Journal of Production Economics, Elsevier, vol. 241(C).
    2. Nobil, Erfan & Cárdenas-Barrón, Leopoldo Eduardo & Garza-Núñez, Dagoberto & Treviño-Garza, Gerardo & Céspedes-Mota, Armando & Loera-Hernández, Imelda de Jesús & Smith, Neale R. & Nobil, Amir Hossein, 2024. "Sustainability inventory management model with warm-up process and shortage," Operations Research Perspectives, Elsevier, vol. 12(C).
    3. San-José, Luis A. & Sicilia, Joaquín & Cárdenas-Barrón, Leopoldo Eduardo & González-de-la-Rosa, Manuel, 2024. "A sustainable inventory model for deteriorating items with power demand and full backlogging under a carbon emission tax," International Journal of Production Economics, Elsevier, vol. 268(C).
    4. Khan, Md. Al-Amin & Cárdenas-Barrón, Leopoldo Eduardo & Treviño-Garza, Gerardo & Céspedes-Mota, Armando, 2023. "Installment for advance payment and pricing decisions for an inventory system under power demand pattern and all-units discount," International Journal of Production Economics, Elsevier, vol. 265(C).
    5. Sweety Gupta & Vinod Kumar Mishra, 2024. "Multi-item stochastic inventory model for deteriorating items with power demand pattern under partial backlogging and joint replenishment," Annals of Operations Research, Springer, vol. 341(2), pages 963-991, October.
    6. Cynthia Griselle De-la-Cruz-Márquez & Leopoldo Eduardo Cárdenas-Barrón & J. David Porter & Imelda de Jesús Loera-Hernández & Neale R. Smith & Armando Céspedes-Mota & Gerardo Treviño-Garza & Rafael Ern, 2023. "An Inventory Model for Growing Items When the Demand Is Price Sensitive with Imperfect Quality, Inspection Errors, Carbon Emissions, and Planned Backorders," Mathematics, MDPI, vol. 11(21), pages 1-45, October.
    7. Terzi, Mourad & Ouazene, Yassine & Yalaoui, Alice & Yalaoui, Farouk, 2023. "Lot-sizing and pricing decisions under attraction demand models and multi-channel environment: New efficient formulations," Operations Research Perspectives, Elsevier, vol. 10(C).
    8. Luis A. San-José & Joaquín Sicilia & Manuel González-de-la-Rosa & Jaime Febles-Acosta, 2022. "Profit maximization in an inventory system with time-varying demand, partial backordering and discrete inventory cycle," Annals of Operations Research, Springer, vol. 316(2), pages 763-783, September.
    9. Su, Rung-Hung & Weng, Ming-Wei & Yang, Chih-Te, 2021. "Effects of corporate social responsibility activities in a two-stage assembly production system with multiple components and imperfect processes," European Journal of Operational Research, Elsevier, vol. 293(2), pages 469-480.
    10. Khan, Md. Al-Amin & Cárdenas-Barrón, Leopoldo Eduardo & Treviño-Garza, Gerardo & Céspedes-Mota, Armando & Loera-Hernández, Imelda de Jesús & Smith, Neale R., 2024. "Effects of variable prepayment installments on pricing and inventory decisions with power demand pattern and non-linear holding cost under carbon cap-and-price regulation," Operations Research Perspectives, Elsevier, vol. 12(C).
    11. Chernonog, Tatyana, 2020. "Inventory and marketing policy in a supply chain of a perishable product," International Journal of Production Economics, Elsevier, vol. 219(C), pages 259-274.

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