IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v33y1987i6p756-762.html
   My bibliography  Save this article

Inventory Policies Under Various Optimizing Criteria and Variable Markup Rates

Author

Listed:
  • F. J. Arcelus

    (Faculty of Administration, University of New Brunswick, P.O. Box 4400, Fredericton, New Brunswick, Canada E3B 5A3)

  • G. Srinivasan

    (Faculty of Administration, University of New Brunswick, P.O. Box 4400, Fredericton, New Brunswick, Canada E3B 5A3)

Abstract

This paper extends the deterministic EOQ model to reflect various optimizing criteria and alternative demand and price structures. Its primary purpose is to develop decision rules for the management of finished goods inventories, especially in retailing, where inventories are evaluated in the same way as any other investment, namely on their ability to generate profits, rather than on the traditional least-cost basis. To that effect, the models developed here consider demand to be a function of price, with price defined as a markup of unit cost. The decision variables are the order quantity and the markup rate. Possible optimizing objectives include profits, return on investment, or residual income, the three most widely used evaluators of short-term investment performance. Optimal solutions for each case are obtained and the resulting inventory policies evaluated.

Suggested Citation

  • F. J. Arcelus & G. Srinivasan, 1987. "Inventory Policies Under Various Optimizing Criteria and Variable Markup Rates," Management Science, INFORMS, vol. 33(6), pages 756-762, June.
    • Handle: RePEc:inm:ormnsc:v:33:y:1987:i:6:p:756-762
    DOI: 10.1287/mnsc.33.6.756
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.33.6.756
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.33.6.756?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:33:y:1987:i:6:p:756-762. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.