The inventory models analyzed in this paper explore the problem in which the lead time and ordering cost reductions are inter-dependent in the continuous review inventory model with backorder price discount. The objective is to minimize total related cost by simultaneously optimizing the order quantity, reorder point, lead time and backorder price discount. Moreover, we assume that the mean and...

This paper investigates the impact of a vendor managed inventory (VMI) strategy upon transportation operations in a supply chain. Specifically, the issue of batching to enable better use of transport vehicles is studied. A system dynamics methodology is used to develop difference equation models of three scenarios–– traditional, internal consolidation and VMI. The holistic nature of inventory m...

In#ation uncertainty is introduced into a basic EOQ model and its potential to make mischief is explored. Among other things, it is shown that even when the expected rate of in#ation is less than the marginal cost of capital, the appropriate discount rate to use in computing a discounted expected total inventory cost will not necessarily be negative. Therefore, the classic EOQ square-root formu...

In the previous chapter we assumed that replenishment is instantaneous and no shortage is permitted (shortage cost infinity).In this chapter we assume that replenishment of inventory does not materialize immediately as placement of order ,rather takes a random amount of time for order materialization .Thus we have now a finite shortage cost situation. Another salient feature of this chapter is ...

In continuous review models with a fixed delivery lag T, the state of the system is conveniently described by the net inventory position = (inventory on hand) plus (outstanding orders), in spite of most cost components depending on the actual inventory on hand. To relate these two inventory concepts one observes that the distribution of the inventory on hand at time t + T is determined by the i...

In this paper the authors consider the continuous deterministic, infinite horizon, single item inventory system within the setting of a retailer sector in which the demand rate for an item is time dependent. The parameter of the replenishment cost is kept constant, but the carrying cost per unit is allowed to vary. The optimal policies are found, and decision rules and classical EOQ model have ...

This paper employs a simulation model in a Supply Chain Management (SCM) system. This study is one of the first to present simulation model of inventory control system in supply chain management using barcode and Radio Frequency Identification (RFID). The main objective of this model is to compare two inventory systems in a supply chain, one using RFID, versus the barcode. The model will help c...

We analyze a supply chain environment in which a distributor facing price-sensitive demand has the opportunity to contractually commit to a delivery quantity at regular intervals over a finite horizon in exchange for a per-unit cost reduction for units acquired via committed delivery. Supplemental orders needed to meet demand are purchased at an additional unit cost. For normally distributed de...

This paper deals with an economic production quantity (EPQ)model for deteriorating items with price and advertisement dependent demand. We have considered three types of continuous probabilistic deterioration functions to determine the total inventory cost. Here, the rate of replenishment is considered to be a variable and the generalized unit production cost function is formulated by incorpora...