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An inventory model with both stock-dependent demand rate and stock-dependent holding cost rate

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  • Yang, Chih-Te

Abstract

In this paper, we develop an inventory model under a stock-dependent demand rate and stock-dependent holding cost rate with relaxed terminal conditions. Shortages are allowed and partially backlogged in the model. The purpose of this study is to determine the optimal order quantity and the ending inventory level such that the total profit per unit time is maximized for the retailer. We first establish a proper model for a mathematical formulation. Then we develop several theoretical results and provide the decision-maker with an algorithm to determine the optimal solution. Finally, numerical examples are provided to illustrate the solution procedure, and a sensitivity analysis of the optimal solution with respect to major parameters is carried out.

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  • Yang, Chih-Te, 2014. "An inventory model with both stock-dependent demand rate and stock-dependent holding cost rate," International Journal of Production Economics, Elsevier, vol. 155(C), pages 214-221.
    • Handle: RePEc:eee:proeco:v:155:y:2014:i:c:p:214-221
    DOI: 10.1016/j.ijpe.2014.01.016
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    Cited by:

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    3. Irfan Ali & Srikant Gupta & Aquil Ahmed, 2019. "Multi-objective linear fractional inventory problem under intuitionistic fuzzy environment," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 10(2), pages 173-189, April.
    4. Lee, W. & Wang, S.-P. & Chen, W.-C., 2017. "Forward and backward stocking policies for a two-level supply chain with consignment stock agreement and stock-dependent demand," European Journal of Operational Research, Elsevier, vol. 256(3), pages 830-840.
    5. Saha, S. & Goyal, S.K., 2015. "Supply chain coordination contracts with inventory level and retail price dependent demand," International Journal of Production Economics, Elsevier, vol. 161(C), pages 140-152.
    6. Minakshi Panda & Anuradha Sahoo, 2023. "Novel Methods for Solving Multi-Objective Non-linear Inventory Model of Highly Deteriorating Items," SN Operations Research Forum, Springer, vol. 4(3), pages 1-22, September.
    7. Cheng-Fu Huang, 2019. "Evaluation of system reliability for a stochastic delivery-flow distribution network with inventory," Annals of Operations Research, Springer, vol. 277(1), pages 33-45, June.
    8. Tal Avinadav & Tatyana Chernonog & Yael Lahav & Uriel Spiegel, 2017. "Dynamic pricing and promotion expenditures in an EOQ model of perishable products," Annals of Operations Research, Springer, vol. 248(1), pages 75-91, January.
    9. Cheng-Fu Huang, 2022. "System reliability for a multi-state distribution network with multiple terminals under stocks," Annals of Operations Research, Springer, vol. 311(1), pages 117-130, April.
    10. Valentín Pando & Luis A. San-José & Joaquín Sicilia, 2021. "An Inventory Model with Stock-Dependent Demand Rate and Maximization of the Return on Investment," Mathematics, MDPI, vol. 9(8), pages 1-18, April.
    11. Sudarshan Bardhan & Haimanti Pal & Bibhas Chandra Giri, 2019. "Optimal replenishment policy and preservation technology investment for a non-instantaneous deteriorating item with stock-dependent demand," Operational Research, Springer, vol. 19(2), pages 347-368, June.
    12. 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.
    13. Zhang, Jianxiong & Wang, Yu & Lu, Lihao & Tang, Wansheng, 2015. "Optimal dynamic pricing and replenishment cycle for non-instantaneous deterioration items with inventory-level-dependent demand," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 136-145.
    14. Mou, Shandong & Robb, David J. & DeHoratius, Nicole, 2018. "Retail store operations: Literature review and research directions," European Journal of Operational Research, Elsevier, vol. 265(2), pages 399-422.
    15. R. Sundara rajan & R. Uthayakumar, 2017. "Comprehensive solution procedure for optimizing replenishment policies of instantaneous deteriorating items with stock-dependent demand under partial trade credit linked to order quantity," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 8(2), pages 1343-1373, November.
    16. Yan-Kwang Chen & Fei-Rung Chiu & Hung-Chang Liao & Chien-Hua Yeh, 2016. "Joint optimization of inventory control and product placement on e-commerce websites using genetic algorithms," Electronic Commerce Research, Springer, vol. 16(4), pages 479-502, December.
    17. Ajoy Hatibaruah & Sumit Saha, 2023. "An inventory model for two-parameter Weibull distributed ameliorating and deteriorating items with stock and advertisement frequency dependent demand under trade credit and preservation technology," OPSEARCH, Springer;Operational Research Society of India, vol. 60(2), pages 951-1002, June.
    18. Hsieh, Tsu-Pang & Dye, Chung-Yuan, 2017. "Optimal dynamic pricing for deteriorating items with reference price effects when inventories stimulate demand," European Journal of Operational Research, Elsevier, vol. 262(1), pages 136-150.

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