IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v41y1995i5p927-936.html
   My bibliography  Save this article

An EOQ Model with Random Variations in Demand

Author

Listed:
  • Percy H. Brill

    (Faculty of Business Administration, University of Windsor, Ontario, Canada N9B 3P4)

  • Ben A. Chaouch

    (Faculty of Business Administration, University of Windsor, Ontario, Canada N9B 3P4)

Abstract

This paper presents a model that incorporates variations in the demand rate at random time points into the inventory planning decision. These changes in demand may occur due to economic recessions, labor strife starting or ending, or other events that result in a period of time during which the rate of demand is shifted up or down from its current level. The paper uses system-point level-crossing theory to derive expressions for the distribution and expected value of on-hand inventory, ordering rate, and the expected total cost rate for a given ordering policy. A sensitivity analysis is conducted, and a number of qualitative properties are provided to illustrate the use of the results to obtain optimal order quantities.

Suggested Citation

  • Percy H. Brill & Ben A. Chaouch, 1995. "An EOQ Model with Random Variations in Demand," Management Science, INFORMS, vol. 41(5), pages 927-936, May.
    • Handle: RePEc:inm:ormnsc:v:41:y:1995:i:5:p:927-936
    DOI: 10.1287/mnsc.41.5.927
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.41.5.927
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.41.5.927?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
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Roni, Mohammad S. & Eksioglu, Sandra D. & Jin, Mingzhou & Mamun, Saleh, 2016. "A hybrid inventory policy with split delivery under regular and surge demand," International Journal of Production Economics, Elsevier, vol. 172(C), pages 126-136.
    2. Mohebbi, Esmail, 2006. "A production-inventory model with randomly changing environmental conditions," European Journal of Operational Research, Elsevier, vol. 174(1), pages 539-552, October.
    3. Kevin Hsu, Wen-Kai & Yu, Hong-Fwu, 2009. "EOQ model for imperfective items under a one-time-only discount," Omega, Elsevier, vol. 37(5), pages 1018-1026, October.
    4. Tien-Yu Lin & Kuo-Lung Hou, 2015. "An imperfect quality economic order quantity with advanced receiving," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 23(2), pages 535-551, July.
    5. Arnoud den Boer & Ohad Perry & Bert Zwart, 2018. "Dynamic pricing policies for an inventory model with random windows of opportunities," Naval Research Logistics (NRL), John Wiley & Sons, vol. 65(8), pages 660-675, December.
    6. Roni, Mohammad S. & Jin, Mingzhou & Eksioglu, Sandra D., 2015. "A hybrid inventory management system responding to regular demand and surge demand," Omega, Elsevier, vol. 52(C), pages 190-200.
    7. Salameh, M. K. & Jaber, M. Y., 2000. "Economic production quantity model for items with imperfect quality," International Journal of Production Economics, Elsevier, vol. 64(1-3), pages 59-64, March.
    8. Azoury, Katy S. & Miyaoka, Julia, 2020. "Optimal and simple approximate solutions to a production-inventory system with stochastic and deterministic demand," European Journal of Operational Research, Elsevier, vol. 286(1), pages 178-189.
    9. Brill, Percy H. & Yu, Kaiqi, 2011. "Analysis of risk models using a level crossing technique," Insurance: Mathematics and Economics, Elsevier, vol. 49(3), pages 298-309.
    10. Ben A. Chaouch, 2007. "Inventory control and periodic price discounting campaigns," Naval Research Logistics (NRL), John Wiley & Sons, vol. 54(1), pages 94-108, February.
    11. Mohebbi, E., 2008. "A note on a production control model for a facility with limited storage capacity in a random environment," European Journal of Operational Research, Elsevier, vol. 190(2), pages 562-570, October.

    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:41:y:1995:i:5:p:927-936. 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.