Supply contracts are designed to minimize inventory costs or to hedge against undesirable events (e.g., shortages) in the face of demand or supply uncertainty. In particular, replenishment terms stipulated by supply contracts need to be optimized with respect to overall costs, profits, service levels, etc. In this paper, we shall be primarily interested in minimizing an inventory cost function ...

We compare two inventory systems, one in which excess demand is lost and the other in which excess demand is backordered. Both systems are reviewed periodically. They experience the same sequence of identically and independently distributed random demands. Holding and shortage costs are considered. The holding cost parameter is identical, however the cost of a lost sale could be different from ...

In this paper, a single-product, single-machine system under Markovian deterioration of machine condition and demand uncertainty is studied.  The objective is to find the optimal intervals for inspection and preventive maintenance activities in a condition-based maintenance planning with discrete monitoring framework. At first, a stochastic dynamic programming model whose state variable is the ...

For the (S − 1, S) lost sales inventory model with several demand classes that have different lost sale penalty cost, three accurate and efficient heuristic algorithms are presented that, at a given base stock level, aim to find optimal values for the critical levels, i.e., values that minimize inventory holding and penalty cost.

In multi-item inventory with very large number of items in retail sale stores, purchase dependency in demand amongst the items can be described by association rules mined from sale transaction data. With the knowledge of association rules, inventory replenishment policy can be designed which will result in low inventory cost and better profitability. The relevant inventory costs include the cos...

a new mathematical model for the optimal production isformulated for the inventory management system under time-varyingand stochastic inflation environment for deteriorating items. the timehorizon is finite and demand rate is dependent to the inflation. in thereal situation, some but not all customers will wait for backlogged itemsduring a shortage period, such as for fashionable commodities or...

This paper addresses the problem of determining the sale price and the production quantity under supply uncertainty. The problem is commonly observed in the agricultural industry. We consider a firm that initially leases farm space in order to grow fruit. The realized amount of fruit supply fluctuates due to weather conditions, diseases, etc. At the end of the growing season, the firm makes two...

This study models a joint pricing, inventory, and preservation decision-making problem for deteriorating items subject to stochastic demand and promotional effort. The generalized price-dependent stochastic demand, time proportional deterioration, and partial backlogging rates are used to model the inventory system. The objective is to find the optimal pricing, replenishment, and preservation t...

in today’s business transactions, it is frequently observed that a customer is allowed some grace period (permissible delay in payment) before settling the account with the supplier or producer. this policy is advantageous both for the supplier and customer since supplier attracts more customers and customer does not have to pay any interest during this fixed period either. in this paper, the r...