Ordering Cost Reduction in Inventory Model with Defective Items and Backorder Price Discount
Joint Authors
Uthayakumar, Ramasamy
Annadurai, Karuppuchamy
Source
Issue
Vol. 2014, Issue 2014 (31 Dec. 2014), pp.1-14, 14 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2014-11-12
Country of Publication
Egypt
No. of Pages
14
Main Subjects
Abstract EN
In the real market, as unsatisfied demands occur, the longer the length of lead time is, the smaller the proportion of backorder would be.
In order to make up for the inconvenience and even the losses of royal and patient customers, the supplier may offer a backorder price discount to secure orders during the shortage period.
Also, ordering policies determined by conventional inventory models may be inappropriate for the situation in which an arrival lot contains some defective items.
To compensate for the inconvenience of backordering and to secure orders, the supplier may offer a price discount on the stockout item.
The purpose of this study is to explore a coordinated inventory model including defective arrivals by allowing the backorder price discount and ordering cost as decision variables.
There are two inventory models proposed in this paper, one with normally distributed demand and another with distribution free demand.
A computer code using the software Matlab 7.0 is developed to find the optimal solution and present numerical examples to illustrate the models.
The results in the numerical examples indicate that the savings of the total cost are realized through ordering cost reduction and backorder price discount.
American Psychological Association (APA)
Annadurai, Karuppuchamy& Uthayakumar, Ramasamy. 2014. Ordering Cost Reduction in Inventory Model with Defective Items and Backorder Price Discount. Journal of Optimization،Vol. 2014, no. 2014, pp.1-14.
https://search.emarefa.net/detail/BIM-1042687
Modern Language Association (MLA)
Annadurai, Karuppuchamy& Uthayakumar, Ramasamy. Ordering Cost Reduction in Inventory Model with Defective Items and Backorder Price Discount. Journal of Optimization No. 2014 (2014), pp.1-14.
https://search.emarefa.net/detail/BIM-1042687
American Medical Association (AMA)
Annadurai, Karuppuchamy& Uthayakumar, Ramasamy. Ordering Cost Reduction in Inventory Model with Defective Items and Backorder Price Discount. Journal of Optimization. 2014. Vol. 2014, no. 2014, pp.1-14.
https://search.emarefa.net/detail/BIM-1042687
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1042687