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Inventory Models With Stock-Dependent Demand And Nonlinear Holding Costs For Deteriorating Items

Author

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  • CHUN-TAO CHANG

    (Department of Statistics, Tamkang University, Tamsui, Taipei, Taiwan 25137, R.O.C.)

Abstract

In this paper, we discuss why it is appropriate maximize the profits, instead of minimizing the costs, in an inventory system with an inventory-level-dependent demand rate. In addition, we restate Urban's viewpoint that the restriction of zero ending-inventory is not necessary in an inventory-level-dependent demand model. Consequently, we amend Giri and Chaudhuri's inventory model for deteriorating items by changing the objective to maximize the profits and relaxing the restriction of zero ending-inventory. Finally, we provide a couple of examples to show that both the order quantity and the profit obtained from our proposed model are significantly larger than those in Giri and Chaudhuri's model, in which the objective is to minimize the costs.

Suggested Citation

  • Chun-Tao Chang, 2004. "Inventory Models With Stock-Dependent Demand And Nonlinear Holding Costs For Deteriorating Items," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 21(04), pages 435-446.
    • Handle: RePEc:wsi:apjorx:v:21:y:2004:i:04:n:s0217595904000321
    DOI: 10.1142/S0217595904000321
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    Citations

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    Cited by:

    1. Chang, Chun-Tao & Teng, Jinn-Tsair & Goyal, Suresh Kumar, 2010. "Optimal replenishment policies for non-instantaneous deteriorating items with stock-dependent demand," International Journal of Production Economics, Elsevier, vol. 123(1), pages 62-68, January.
    2. Goyal, Suresh Kumar & Chang, Chun-Tao, 2009. "Optimal ordering and transfer policy for an inventory with stock dependent demand," European Journal of Operational Research, Elsevier, vol. 196(1), pages 177-185, July.
    3. Sana, Shib Sankar, 2013. "Sales team's initiatives and stock sensitive demand — A production control policy," Economic Modelling, Elsevier, vol. 31(C), pages 783-788.
    4. Md Sadikur Rahman & Subhajit Das & Amalesh Kumar Manna & Ali Akbar Shaikh & Asoke Kumar Bhunia & Leopoldo Eduardo Cárdenas-Barrón & Gerardo Treviño-Garza & Armando Céspedes-Mota, 2021. "A Mathematical Model of the Production Inventory Problem for Mixing Liquid Considering Preservation Facility," Mathematics, MDPI, vol. 9(24), pages 1-19, December.
    5. 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.
    6. Urban, Timothy L., 2008. "An extension of inventory models with discretely variable holding costs," International Journal of Production Economics, Elsevier, vol. 114(1), pages 399-403, July.
    7. Mahmood Vahdani & Zeinab Sazvar & Kannan Govindan, 2022. "An integrated economic disposal and lot-sizing problem for perishable inventories with batch production and corrupt stock-dependent holding cost," Annals of Operations Research, Springer, vol. 315(2), pages 2135-2167, August.
    8. 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.
    9. 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.
    10. Shih-Hsien Tseng & Jia-Chen Yu, 2019. "Data-Driven Iron and Steel Inventory Control Policies," Mathematics, MDPI, vol. 7(8), pages 1-15, August.
    11. Md. Abdul Hakim & Ibrahim M. Hezam & Adel Fahad Alrasheedi & Jeonghwan Gwak, 2022. "Pricing Policy in an Inventory Model with Green Level Dependent Demand for a Deteriorating Item," Sustainability, MDPI, vol. 14(8), pages 1-16, April.
    12. Guchhait, Partha & Kumar Maiti, Manas & Maiti, Manoranjan, 2013. "Production-inventory models for a damageable item with variable demands and inventory costs in an imperfect production process," International Journal of Production Economics, Elsevier, vol. 144(1), pages 180-188.
    13. Pahl, Julia & Voß, Stefan, 2014. "Integrating deterioration and lifetime constraints in production and supply chain planning: A survey," European Journal of Operational Research, Elsevier, vol. 238(3), pages 654-674.
    14. 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.
    15. Majumder, P. & Bera, U.K. & Maiti, M., 2016. "An EPQ model for two-warehouse in unremitting release pattern with two-level trade credit period concerning both supplier and retailer," Applied Mathematics and Computation, Elsevier, vol. 274(C), pages 430-458.

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