Optimal Price and Lot Size for an EOQ Model with Full Backordering under Power Price and Time Dependent Demand
In this paper, we address an inventory system where the demand rate multiplicatively combines the effects of time and selling price. It is assumed that the demand rate is the product of two power functions, one depending on the selling price and the other on the time elapsed since the last inventory...
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| Format: | Article |
| Language: | English |
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MDPI AG
2021-08-01
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| Series: | Mathematics |
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| Online Access: | https://www.mdpi.com/2227-7390/9/16/1848 |
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| author | Luis A. San-José Joaquín Sicilia Manuel González-de-la-Rosa Jaime Febles-Acosta |
| author_facet | Luis A. San-José Joaquín Sicilia Manuel González-de-la-Rosa Jaime Febles-Acosta |
| author_sort | Luis A. San-José |
| collection | DOAJ |
| description | In this paper, we address an inventory system where the demand rate multiplicatively combines the effects of time and selling price. It is assumed that the demand rate is the product of two power functions, one depending on the selling price and the other on the time elapsed since the last inventory replenishment. Shortages are allowed and fully backlogged. The aim is to obtain the lot sizing, the inventory cycle and the unit selling price that maximize the profit per unit time. To achieve this, two efficient algorithms are proposed to obtain the optimal solution to the inventory problem for all possible parameter values of the system. We solve several numerical examples to illustrate the theoretical results and the solution methodology. We also develop a numerical sensitivity analysis of the optimal inventory policy and the maximum profit with respect to the parameters of the demand function. |
| first_indexed | 2024-03-10T08:37:48Z |
| format | Article |
| id | doaj.art-21bb384900e645d6a1d38d49f0e2f401 |
| institution | Directory Open Access Journal |
| issn | 2227-7390 |
| language | English |
| last_indexed | 2024-03-10T08:37:48Z |
| publishDate | 2021-08-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Mathematics |
| spelling | doaj.art-21bb384900e645d6a1d38d49f0e2f4012023-11-22T08:32:50ZengMDPI AGMathematics2227-73902021-08-01916184810.3390/math9161848Optimal Price and Lot Size for an EOQ Model with Full Backordering under Power Price and Time Dependent DemandLuis A. San-José0Joaquín Sicilia1Manuel González-de-la-Rosa2Jaime Febles-Acosta3IMUVA-Mathematics Research Institute, University of Valladolid, 47011 Valladolid, SpainDepartment of Mathematics, Statistics and Operational Research, University of La Laguna, 38200 San Cristóbal de La Laguna, SpainDepartment of Business Administration and Economic History, University of La Laguna, 38200 San Cristóbal de La Laguna, SpainDepartment of Business Administration and Economic History, University of La Laguna, 38200 San Cristóbal de La Laguna, SpainIn this paper, we address an inventory system where the demand rate multiplicatively combines the effects of time and selling price. It is assumed that the demand rate is the product of two power functions, one depending on the selling price and the other on the time elapsed since the last inventory replenishment. Shortages are allowed and fully backlogged. The aim is to obtain the lot sizing, the inventory cycle and the unit selling price that maximize the profit per unit time. To achieve this, two efficient algorithms are proposed to obtain the optimal solution to the inventory problem for all possible parameter values of the system. We solve several numerical examples to illustrate the theoretical results and the solution methodology. We also develop a numerical sensitivity analysis of the optimal inventory policy and the maximum profit with respect to the parameters of the demand function.https://www.mdpi.com/2227-7390/9/16/1848EOQ inventory modelshortageslot sizingoptimal pricingprofit maximization |
| spellingShingle | Luis A. San-José Joaquín Sicilia Manuel González-de-la-Rosa Jaime Febles-Acosta Optimal Price and Lot Size for an EOQ Model with Full Backordering under Power Price and Time Dependent Demand Mathematics EOQ inventory model shortages lot sizing optimal pricing profit maximization |
| title | Optimal Price and Lot Size for an EOQ Model with Full Backordering under Power Price and Time Dependent Demand |
| title_full | Optimal Price and Lot Size for an EOQ Model with Full Backordering under Power Price and Time Dependent Demand |
| title_fullStr | Optimal Price and Lot Size for an EOQ Model with Full Backordering under Power Price and Time Dependent Demand |
| title_full_unstemmed | Optimal Price and Lot Size for an EOQ Model with Full Backordering under Power Price and Time Dependent Demand |
| title_short | Optimal Price and Lot Size for an EOQ Model with Full Backordering under Power Price and Time Dependent Demand |
| title_sort | optimal price and lot size for an eoq model with full backordering under power price and time dependent demand |
| topic | EOQ inventory model shortages lot sizing optimal pricing profit maximization |
| url | https://www.mdpi.com/2227-7390/9/16/1848 |
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