Periodic inventory model with unstable lead-time and setup cost with backorder discount

The main purpose of this study is to investigate the periodic inventory model with backorder price discounts, where shortages are partially backlogged. The application of just-in-time (JIT) philosophy i.e., crashing of the lead-time and setup cost has been carried component wise. Two cases have been discussed viz 1 protection interval demand distribution is known (normal distribution approach) 2 protection level demand distribution is unknown (minimax distribution approach). An algorithm has been developed which jointly optimises the review period, the backorder price discount, the setup cost and lead-time for a known service level. Numerical results clearly indicate that significant savings could be achieved. (2010) 'Periodic inventory model with unstable lead-time and setup cost with backorder discount', Int.