Retailer’s optimal strategy for fixed lifetime products

This model illustrates an inventory model to obtain retailer’s optimal replenishment policy for deteriorating items with fixed lifetime, shortages, and time dependent backorder rate. The backorder rate is assumed as a decreasing function of waiting time up to the next replenishment. The aim is to mi...

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Bibliographic Details
Published in:International journal of machine learning and cybernetics 2016-02, Vol.7 (1), p.121-133
Main Authors: Sarkar, Biswajit, Sarkar, Sumon, Yun, Won Young
Format: Article
Language:English
Subjects:
Artificial Intelligence
Backorders
Complex Systems
Computational Intelligence
Control
Cost analysis
Customers
Engineering
Graphical representations
Inventory
Mathematical models
Mechatronics
Order quantity
Original Article
Pattern Recognition
Profits
Replenishment
Robotics
Sensitivity analysis
Shortages
Systems Biology
Time dependence
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Summary:This model illustrates an inventory model to obtain retailer’s optimal replenishment policy for deteriorating items with fixed lifetime, shortages, and time dependent backorder rate. The backorder rate is assumed as a decreasing function of waiting time up to the next replenishment. The aim is to minimize the total relevant cost of the system. The necessary and sufficient conditions are derived analytically. Some lemmas are established for the existence and uniqueness of optimal solution. Finally, some numerical examples, sensitivity analysis, comparison with other models, study of non-considering lifetime of products along with graphical representations are provided to illustrate the proposed model. From the numerical example, this model proves more savings than Wu et al. (Int J Prod Econ 101:369–384, 2006 ).
ISSN:1868-8071
1868-808X
DOI:10.1007/s13042-015-0393-y