TAILIEUCHUNG - Optimal inventory policies for imperfect inventory with price dependent stochastic demand and partially backlogged shortages

The paper investigates a single period imperfect inventory model with price dependent stochastic demand and partial backlogging. The backorder rate is a nonlinear non-increasing function of the magnitude of shortage. Two special cases are considered assuming that the percentage of defective items follows a truncated exponential distribution and a normal distribution respectively. The optimal order quantity and the optimal mark up value are determined such that the expected total profit of the system is maximized. | Yugoslav Journal of Operations Research 22 (2012), Number , 199-223 DOI: OPTIMAL INVENTORY POLICIES FOR IMPERFECT INVENTORY WITH PRICE DEPENDENT STOCHASTIC DEMAND AND PARTIALLY BACKLOGGED SHORTAGES Jhuma BHOWMICK Department of Mathematics, Maharaja Manindra Chandra College, Kolkata, India . SAMANTA Department of Mathematics, Bengal Engineering and Science University, Shibpur, Howrah, India g_p_samanta@ Received: October 2010 / Accepted: February 2012 Abstract: The paper investigates a single period imperfect inventory model with price dependent stochastic demand and partial backlogging. The backorder rate is a nonlinear non-increasing function of the magnitude of shortage. Two special cases are considered assuming that the percentage of defective items follows a truncated exponential distribution and a normal distribution respectively. The optimal order quantity and the optimal mark up value are determined such that the expected total profit of the system is maximized. Numerical example is given to illustrate the proposed model which is compared with the traditional model of perfect stock. Sensitivity analysis is performed to explain the behavior of the proposed model with respect to the key parameters. Keywords: Imperfect inventory, price-dependent stochastic demand, random defective units, partial backlogging. MSC: 90B05. 1. INTRODUCTION The traditional inventory models generally assume that an ordered lot contains all perfect items and hence, the possibility of shortage due to imperfect items in the accepted lot is ignored. But in reality, this concept is not fully acceptable in view of the extensive use of acceptance sampling in the quality control process in today’s business 200 J. Bhowmick, . Samanta / Optimal Inventory Policies for Imperfect Inventory and industry scenario. Ignoring this possibility may cause shortage during the selling season, and consequently increase the operating costs of the inventory .

• Kinh tế học
• Imperfect inventory
• Price dependent stochastic demand
• Random defective units
• Partial backlogging
• Truncated exponential distribution
• Normal distribution respectively
• Integrated multi stage supply chain inventory model
• Imperfect production process
• The integrated production inventory system
• Integrated supply chain
• The replenishment decisions for procurement
• Integrated model
• Minmax distribution free approach
• Defective items
• Controllable lead time
• Free demand