Profit maximization in an inventory system with time-varying demand, partial backordering and discrete inventory cycle

Abstract In this paper, an inventory problem where the cycle must be integer multiple of a known basic period is considered. Furthermore, demand rate in each power time-dependent function. Shortages are allowed but, taking necessities or interests customers into account, only fixed proportion during stock-out satisfied with arrival next replenishment. The costs related to management system ordering cost, purchasing holding backordering cost and lost sale cost. determine best policy that maximizes profit per unit time, which difference between income obtained from sales product sum previous costs. modeling leads nonlinear mathematical programming problem. To solve problem, new efficient algorithm calculate optimal economic order quantity proposed. Numerical examples presented illustrate how works policies. A sensitivity analysis respect some parameters developed. Finally, conclusions suggestions for future research lines given.