Abstract
This paper investigates a production planning problem in which the inventory is deteriorating at a constant rate, demand is price dependent and back-order is allowed. It is assumed in most previous works that back-ordering customers may not cancel their orders. However, in reality, many customers may withdraw or cancel their orders before receiving their orders. Tacking the cancellation phenomenon into account, this paper develops a continuous-time model to simultaneously determine the production decision and the selling price. A simple algorithm is used to obtain the optimal solutions. Numerical examples are also used to illustrate the solution searching procedure and the characteristics of the optimal decisions.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Balkhi, Z.T., Benkherouf, L.: A production lot size inventory model for deteriorating items and arbitrary production and demand rates. European Journal of Operational Research 92, 302–309 (1996)
Balkhi, Z.T.: On a finite horizon production lot size inventory model for deteriorating items: An optimal solution. European Journal of Operational Research 132, 210–223 (2001)
Balkhi, Z.T.: The effects of learning on the optimal production lot size for deteriorating and partially backordered items with time varying demand and deterioration rates. Applied Mathematical Modelling 27, 763–779 (2003)
Ghare, P.M., Schrader, G.P.: A model for exponentially decaying inventory. Journal of Industrial Engineering 32, 137–142 (1963)
Kim, C.H., Hong, Y.: An optimal production run length in deteriorating production processes. International Journal of Production Economics 58, 183–189 (1999)
G.C. Lin, D.E. Kroll and C.J. Lin (2006) Determining a common production cycle time for an economic lot scheduling problem with deteriorating items.pdf European Journal of Operational Research, 173, 669-682.
Pal, A.K., Bhunia, A.K., Mukherjee, R.N.: Optimal lot size model for deteriorating items with demand rate dependent on displayed stock level (DSL) and partial backordering. European Journal of Operational Research 175, 977–991 (2006)
Skouri, K., Papachristos, S.: Optimal stopping and restarting production times for an EOQ model with deteriorating items and time-dependent partial backlogging. International Journal of Production Economics 81–82, 525–531 (2003)
Wee, H.M.: Economic production lot size for deteriorating items taking account of the time-value of money. Computers and Operations Research 26, 545–558 (1999)
Author information
Authors and Affiliations
Editor information
Rights and permissions
Copyright information
© 2007 Springer Berlin Heidelberg
About this paper
Cite this paper
You, PS., Hsieh, YC. (2007). A Lot Size Model for Deteriorating Inventory with Back-Order Cancellation. In: Okuno, H.G., Ali, M. (eds) New Trends in Applied Artificial Intelligence. IEA/AIE 2007. Lecture Notes in Computer Science(), vol 4570. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-73325-6_100
Download citation
DOI: https://doi.org/10.1007/978-3-540-73325-6_100
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-73322-5
Online ISBN: 978-3-540-73325-6
eBook Packages: Computer ScienceComputer Science (R0)