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EOQ with a correlated binomial supply

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  • Nasr, Walid W.
  • Maddah, Bacel
  • Salameh, Moueen K.

Abstract

This paper considers a variant of the economic order quantity (EOQ) model under random supply. A binomial supply model is adopted where every item received is of imperfect quality with the same probability. We study the realistic case where the qualities of items in an order are correlated and draw useful insights, the most interesting of which is that correlation decreases the order size. Several practical correlation patterns are investigated and discussed. We also show that several commonly used models in the literature can be represented by an equivalent correlated binomial supply model.

Suggested Citation

  • Nasr, Walid W. & Maddah, Bacel & Salameh, Moueen K., 2013. "EOQ with a correlated binomial supply," International Journal of Production Economics, Elsevier, vol. 144(1), pages 248-255.
    • Handle: RePEc:eee:proeco:v:144:y:2013:i:1:p:248-255
    DOI: 10.1016/j.ijpe.2013.02.011
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    Cited by:

    1. Skouri, K. & Konstantaras, I. & Lagodimos, A.G. & Papachristos, S., 2014. "An EOQ model with backorders and rejection of defective supply batches," International Journal of Production Economics, Elsevier, vol. 155(C), pages 148-154.
    2. Avinadav, Tal & Herbon, Avi & Spiegel, Uriel, 2014. "Optimal ordering and pricing policy for demand functions that are separable into price and inventory age," International Journal of Production Economics, Elsevier, vol. 155(C), pages 406-417.
    3. Nasr, Walid W. & Jaber, Mohamad Y., 2019. "Supplier development in a two-level lot sizing problem with non-conforming items and learning," International Journal of Production Economics, Elsevier, vol. 216(C), pages 349-363.
    4. Jaber, Mohamad Y. & Zanoni, Simone & Zavanella, Lucio E., 2014. "Economic order quantity models for imperfect items with buy and repair options," International Journal of Production Economics, Elsevier, vol. 155(C), pages 126-131.

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