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Economic order quantity model for growing items with imperfect quality

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  • Sebatjane, Makoena
  • Adetunji, Olufemi

Abstract

While the basic economic order quantity model has found some practical applications, it makes a number of assumptions which do not reflect most real life inventory systems. This paper proposes an inventory system where the items ordered are capable of growing during the course of the inventory replenishment cycle, for example livestock. Furthermore, it is assumed that a certain fraction of the items is of poorer quality than desired. It is also assumed that live newborn items are ordered and fed until they grow to a customer-preferred weight, after which they are slaughtered. Before all the slaughtered items are put on sale, they are screened so as to separate the good quality items from those of poorer quality. In order to determine the optimal inventory policy, a model, which aims to maximize the expected total profit, is developed and numerical examples are provided to illustrate the model and the solution procedure. The logistic growth function is compared to the linear and split linear growth functions. The margin of error between the results of the split linear function and the logistic growth function were found to be smaller than between the logistic and linear function. In addition, it was found that the optimal order quantity was most sensitive to the target slaughter weight.

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  • Sebatjane, Makoena & Adetunji, Olufemi, 2019. "Economic order quantity model for growing items with imperfect quality," Operations Research Perspectives, Elsevier, vol. 6(C).
    • Handle: RePEc:eee:oprepe:v:6:y:2019:i:c:s2214716018301866
    DOI: 10.1016/j.orp.2018.11.004
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    3. Pourmohammad-Zia, Nadia & Karimi, Behrooz & Rezaei, Jafar, 2021. "Food supply chain coordination for growing items: A trade-off between market coverage and cost-efficiency," International Journal of Production Economics, Elsevier, vol. 242(C).
    4. Amir Hossein Nobil & Erfan Nobil & Leopoldo Eduardo Cárdenas-Barrón & Dagoberto Garza-Núñez & Gerardo Treviño-Garza & Armando Céspedes-Mota & Imelda de Jesús Loera-Hernández & Neale R. Smith, 2023. "Economic Order Quantity for Growing Items with Mortality Function under Sustainable Green Breeding Policy," Mathematics, MDPI, vol. 11(4), pages 1-21, February.
    5. Makoena Sebatjane & Olufemi Adetunji, 2022. "Optimal inventory replenishment and shipment policies in a three-echelon supply chain for growing items with expiration dates," OPSEARCH, Springer;Operational Research Society of India, vol. 59(3), pages 809-838, September.
    6. Buisman, Marjolein E. & Rohmer, Sonja U.K., 2022. "Inventory decisions for ameliorating products under consideration of stochastic demand," International Journal of Production Economics, Elsevier, vol. 252(C).
    7. Solano-Blanco, Alfaima L. & González, Jaime E. & Medaglia, Andrés L., 2023. "Production planning decisions in the broiler chicken supply chain with growth uncertainty," Operations Research Perspectives, Elsevier, vol. 10(C).
    8. Sebatjane, Makoena, 2022. "The impact of preservation technology investments on lot-sizing and shipment strategies in a three-echelon food supply chain involving growing and deteriorating items," Operations Research Perspectives, Elsevier, vol. 9(C).
    9. S. Rajeswari & C. Sugapriya & D. Nagarajan, 2022. "An analysis of uncertain situation and advance payment system on a double-storage fuzzy inventory model," OPSEARCH, Springer;Operational Research Society of India, vol. 59(1), pages 20-40, March.
    10. Amir Hossein Nobil & Erfan Nobil & Leopoldo Eduardo Cárdenas-Barrón & Dagoberto Garza-Núñez & Gerardo Treviño-Garza & Armando Céspedes-Mota & Imelda de Jesús Loera-Hernández & Neale R. Smith, 2023. "Discontinuous Economic Growing Quantity Inventory Model," Mathematics, MDPI, vol. 11(15), pages 1-11, July.
    11. Sebatjane, Makoena & Adetunji, Olufemi, 2020. "A three-echelon supply chain for economic growing quantity model with price- and freshness-dependent demand: Pricing, ordering and shipment decisions," Operations Research Perspectives, Elsevier, vol. 7(C).
    12. Sanni, S. & Jovanoski, Z. & Sidhu, H.S., 2020. "An economic order quantity model with reverse logistics program," Operations Research Perspectives, Elsevier, vol. 7(C).
    13. Amir Hossein Nobil & Erfan Nobil & Leopoldo Eduardo Cárdenas-Barrón & Dagoberto Garza-Núñez & Gerardo Treviño-Garza & Armando Céspedes-Mota & Imelda de Jesús Loera-Hernández & Neale R. Smith, 2023. "Economic Growing Quantity Model with Mortality in Newborn Items and Inhibition Cost of Ammonia Production under All-Units Discount Policy," Sustainability, MDPI, vol. 15(10), pages 1-16, May.

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