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Analysis of an EOQ inventory model with partial backordering and non-linear unit holding cost

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  • San-José, L.A.
  • Sicilia, J.
  • García-Laguna, J.

Abstract

In this paper, an economic order quantity inventory model is analyzed, considering that the unit cumulative holding cost has two significant components: a fixed cost which represents the cost of accommodating the item in the warehouse and a variable cost given by a potential function of the length of time over which the item is held in stock. Shortages are allowed and, during the stockout period, only a fraction of demand is partially backordered. The backordering cost includes a fixed cost and a cost linearly dependent on the length of time for which backorder exists. A solution procedure is developed for determining the optimal inventory policy. Moreover, to illustrate the effects of some parameters on the optimal policy and the minimum total inventory cost, a numerical study is developed.

Suggested Citation

  • San-José, L.A. & Sicilia, J. & García-Laguna, J., 2015. "Analysis of an EOQ inventory model with partial backordering and non-linear unit holding cost," Omega, Elsevier, vol. 54(C), pages 147-157.
    • Handle: RePEc:eee:jomega:v:54:y:2015:i:c:p:147-157
    DOI: 10.1016/j.omega.2015.01.007
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