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Disposal of Excess Inventory

Author

Listed:
  • Donald B. Rosenfield

    (Massachusetts Institute of Technology, Cambridge, Massachusetts)

Abstract

This paper deals with the problem of disposal of slow-moving or obsolete inventory. For many reasons, companies will find themselves in an overstock situation where the potential sales value of excess stock, less the expected storage costs, does not match the salvage value. We present relationships for the optimum number of items to keep under conditions of stochastic demand and perishing.

Suggested Citation

  • Donald B. Rosenfield, 1989. "Disposal of Excess Inventory," Operations Research, INFORMS, vol. 37(3), pages 404-409, June.
    • Handle: RePEc:inm:oropre:v:37:y:1989:i:3:p:404-409
    DOI: 10.1287/opre.37.3.404
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    Citations

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    Cited by:

    1. Lenhard, Severin, 2022. "Imperfect Competition with Costly Disposal," VfS Annual Conference 2022 (Basel): Big Data in Economics 264038, Verein für Socialpolitik / German Economic Association.
    2. Pinçe, Çerag & Dekker, Rommert, 2011. "An inventory model for slow moving items subject to obsolescence," European Journal of Operational Research, Elsevier, vol. 213(1), pages 83-95, August.
    3. Chen, Cheng-Kang & Jo Min, K., 1995. "Optimal inventory and disposal policies in response to a sale," International Journal of Production Economics, Elsevier, vol. 42(1), pages 17-27, November.
    4. Z Shen & M Dessouky & F Ordonez, 2011. "Perishable inventory management system with a minimum volume constraint," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(12), pages 2063-2082, December.
    5. Qing Li & Peiwen Yu & Xiaoli Wu, 2016. "Managing Perishable Inventories in Retailing: Replenishment, Clearance Sales, and Segregation," Operations Research, INFORMS, vol. 64(6), pages 1270-1284, December.
    6. Lenhard, Severin, 2022. "Imperfect competition with costly disposal," International Journal of Industrial Organization, Elsevier, vol. 82(C).
    7. Willoughby, Keith A., 2001. "Project procurement and disposal decisions: An inventory management model," International Journal of Production Economics, Elsevier, vol. 71(1-3), pages 467-472, May.
    8. Alexandar Angelus, 2011. "A Multiechelon Inventory Problem with Secondary Market Sales," Management Science, INFORMS, vol. 57(12), pages 2145-2162, December.
    9. Silver, Edward A. & A. Willoughby, Keith, 1999. "Disposal of excess stock at the end of a project when facing on-going operational usage," International Journal of Production Economics, Elsevier, vol. 59(1-3), pages 189-194, March.
    10. Severin Lenhard, 2021. "Imperfect Competition with Costly Disposal," Diskussionsschriften dp2105, Universitaet Bern, Departement Volkswirtschaft.
    11. Li‐Ming Chen & Amar Sapra, 2021. "Inventory renewal for a perishable product: Economies of scale and age‐dependent demand," Naval Research Logistics (NRL), John Wiley & Sons, vol. 68(3), pages 359-377, April.

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