IDEAS home Printed from https://ideas.repec.org/a/spr/operea/v18y2018i2d10.1007_s12351-016-0279-0.html
   My bibliography  Save this article

An EOQ model with backlog-dependent demand

Author

Listed:
  • K. Skouri

    (University of Ioannina)

Abstract

The impact of stockout has been underlined in many consumer studies. According to them, stock-out affects consumers’ purchase decisions and this is especially true on online shopping. In this paper, an inventory model is considered, under the classical EOQ framework, by assuming that shortages affect the customers’ demand. To this end, during shortages period, the demand rate decreases proportionally to the existing backlogging. Then, in order for the total cost to be obtained, the backlogged demand rate is approximated by a piecewise constant function. For this approximated model, the reorder interval, that minimizes the total cost, is determined in closed form. Comparisons, through numerical examples, between a specific backlogging rate (already used in the literature) and the proposed approximation, indicate that this approximation gives high quality results.

Suggested Citation

  • K. Skouri, 2018. "An EOQ model with backlog-dependent demand," Operational Research, Springer, vol. 18(2), pages 561-574, July.
    • Handle: RePEc:spr:operea:v:18:y:2018:i:2:d:10.1007_s12351-016-0279-0
    DOI: 10.1007/s12351-016-0279-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s12351-016-0279-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s12351-016-0279-0?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Eric T. Anderson & Gavan J. Fitzsimons & Duncan Simester, 2006. "Measuring and Mitigating the Costs of Stockouts," Management Science, INFORMS, vol. 52(11), pages 1751-1763, November.
    2. Pentico, David W. & Toews, Carl & Drake, Matthew J., 2015. "Approximating the EOQ with partial backordering at an exponential or rational rate by a constant or linearly changing rate," International Journal of Production Economics, Elsevier, vol. 162(C), pages 151-159.
    3. Padmanabhan, G. & Vrat, Prem, 1995. "EOQ models for perishable items under stock dependent selling rate," European Journal of Operational Research, Elsevier, vol. 86(2), pages 281-292, October.
    4. Anantaram Balakrishnan & Michael S. Pangburn & Euthemia Stavrulaki, 2004. ""Stack Them High, Let 'em Fly": Lot-Sizing Policies When Inventories Stimulate Demand," Management Science, INFORMS, vol. 50(5), pages 630-644, May.
    5. Taleizadeh, Ata Allah & Mohammadi, Babak & Cárdenas-Barrón, Leopoldo Eduardo & Samimi, Hadi, 2013. "An EOQ model for perishable product with special sale and shortage," International Journal of Production Economics, Elsevier, vol. 145(1), pages 318-338.
    6. Bakker, Monique & Riezebos, Jan & Teunter, Ruud H., 2012. "Review of inventory systems with deterioration since 2001," European Journal of Operational Research, Elsevier, vol. 221(2), pages 275-284.
    7. Stanley Gershwin & Bariş Tan & Michael Veatch, 2009. "Production control with backlog-dependent demand," IISE Transactions, Taylor & Francis Journals, vol. 41(6), pages 511-523.
    8. Yu-Sheng Zheng, 1992. "On Properties of Stochastic Inventory Systems," Management Science, INFORMS, vol. 38(1), pages 87-103, January.
    9. Teng, Jinn-Tsair & Krommyda, Iris-Pandora & Skouri, Konstantina & Lou, Kuo-Ren, 2011. "A comprehensive extension of optimal ordering policy for stock-dependent demand under progressive payment scheme," European Journal of Operational Research, Elsevier, vol. 215(1), pages 97-104, November.
    10. BREUGELMANS, Els & CAMPO, Katia & GIJSBRECHTS, Els, 2005. "Opportunities for active stock-out management in online stores: The impact of the stock-out policy on online stock-out reactions," Working Papers 2005005, University of Antwerp, Faculty of Business and Economics.
    11. Pentico, David W. & Drake, Matthew J., 2011. "A survey of deterministic models for the EOQ and EPQ with partial backordering," European Journal of Operational Research, Elsevier, vol. 214(2), pages 179-198, October.
    12. Uday S. Rao, 2003. "Properties of the Periodic Review (R, T) Inventory Control Policy for Stationary, Stochastic Demand," Manufacturing & Service Operations Management, INFORMS, vol. 5(1), pages 37-53, February.
    13. P. L. Abad, 1996. "Optimal Pricing and Lot-Sizing Under Conditions of Perishability and Partial Backordering," Management Science, INFORMS, vol. 42(8), pages 1093-1104, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. Tal Avinadav, 2016. "Stochastic Periodic-Review Models with Duration- and Quantity-Dependent Inventory Costs: Properties and Approximations," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 33(04), pages 1-25, August.
    3. Taleizadeh, Ata Allah, 2014. "An EOQ model with partial backordering and advance payments for an evaporating item," International Journal of Production Economics, Elsevier, vol. 155(C), pages 185-193.
    4. Vandana, & Kaur, Arshinder, 2019. "Two-level trade credit with default risk in the supply chain under stochastic demand," Omega, Elsevier, vol. 88(C), pages 4-23.
    5. Yan, Xiaoming & Chao, Xiuli & Lu, Ye, 2024. "Optimal control policies for dynamic inventory systems with service level dependent demand," European Journal of Operational Research, Elsevier, vol. 314(3), pages 935-949.
    6. Wang, Wan-Chih & Teng, Jinn-Tsair & Lou, Kuo-Ren, 2014. "Seller’s optimal credit period and cycle time in a supply chain for deteriorating items with maximum lifetime," European Journal of Operational Research, Elsevier, vol. 232(2), pages 315-321.
    7. Reza Maihami & Behrooz Karimi & Seyyed Mohammad Taghi Fatemi Ghomi, 2017. "Effect of two-echelon trade credit on pricing-inventory policy of non-instantaneous deteriorating products with probabilistic demand and deterioration functions," Annals of Operations Research, Springer, vol. 257(1), pages 237-273, October.
    8. Tal Avinadav, 2015. "Continuous accounting of inventory costs with Brownian-motion and Poisson demand processes," Annals of Operations Research, Springer, vol. 229(1), pages 85-102, June.
    9. Dobson, Gregory & Pinker, Edieal J. & Yildiz, Ozlem, 2017. "An EOQ model for perishable goods with age-dependent demand rate," European Journal of Operational Research, Elsevier, vol. 257(1), pages 84-88.
    10. Marcus Ang & Karl Sigman & Jing-Sheng Song & Hanqin Zhang, 2017. "Closed-Form Approximations for Optimal ( r , q ) and ( S , T ) Policies in a Parallel Processing Environment," Operations Research, INFORMS, vol. 65(5), pages 1414-1428, October.
    11. Chu, Peter & Chung, Kun-Jen, 2004. "The sensitivity of the inventory model with partial backorders," European Journal of Operational Research, Elsevier, vol. 152(1), pages 289-295, January.
    12. Lihao Lu & Jianxiong Zhang & Wansheng Tang, 2016. "Optimal dynamic pricing and replenishment policy for perishable items with inventory-level-dependent demand," International Journal of Systems Science, Taylor & Francis Journals, vol. 47(6), pages 1480-1494, April.
    13. 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.
    14. Xuanming Su & Fuqiang Zhang, 2009. "On the Value of Commitment and Availability Guarantees When Selling to Strategic Consumers," Management Science, INFORMS, vol. 55(5), pages 713-726, May.
    15. Becerril-Arreola, Rafael & Leng, Mingming & Parlar, Mahmut, 2013. "Online retailers’ promotional pricing, free-shipping threshold, and inventory decisions: A simulation-based analysis," European Journal of Operational Research, Elsevier, vol. 230(2), pages 272-283.
    16. Onur Kaya & Aylin Lelizar Polat, 2017. "Coordinated pricing and inventory decisions for perishable products," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 39(2), pages 589-606, March.
    17. Sarkar, Biswajit & Sarkar, Sumon, 2013. "An improved inventory model with partial backlogging, time varying deterioration and stock-dependent demand," Economic Modelling, Elsevier, vol. 30(C), pages 924-932.
    18. Miao, Jie & Liu, Aijun & Wang, Ruiyao & Lu, Hui, 2022. "The influence of information asymmetry on the strategic inventory of deteriorating commodity," Omega, Elsevier, vol. 107(C).
    19. Mamta Gupta & Sunil Tiwari & Chandra K. Jaggi, 2020. "Retailer’s ordering policies for time-varying deteriorating items with partial backlogging and permissible delay in payments in a two-warehouse environment," Annals of Operations Research, Springer, vol. 295(1), pages 139-161, December.
    20. Maryam Ghoreishi, 2019. "Testing the robustness of deterministic models of optimal dynamic pricing and lot-sizing for deteriorating items under stochastic conditions," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 27(4), pages 1131-1152, December.

    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:spr:operea:v:18:y:2018:i:2:d:10.1007_s12351-016-0279-0. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.