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Exponentially decaying inventory with partial back‐ordering
Author(s) -
Wee HuiMing,
Mercan H. Murat
Publication year - 1999
Publication title -
optimal control applications and methods
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.458
H-Index - 44
eISSN - 1099-1514
pISSN - 0143-2087
DOI - 10.1002/(sici)1099-1514(199901/02)20:1<43::aid-oca643>3.0.co;2-8
Subject(s) - convexity , mathematical economics , function (biology) , upper and lower bounds , mathematics , combinatorics , economics , mathematical analysis , financial economics , evolutionary biology , biology
Most of the research in decaying inventory models considers either complete back‐ordering or complete lost sale. The analysis on partial back‐ordering has received relatively little attention. In this study, a partial back‐ordered inventory model for an item which deteriorates exponentially is developed. It is demonstrated that models with complete back‐ordering and complete lost sales are special cases of the general model. Also, a lower bound on the back‐ordered ratio is obtained to ensure convexity of the total cost function. A numerical example to illustrate the theory is provided. Copyright © 1999 John Wiley & Sons, Ltd.