TY - JOUR
T1 - Optimal inventory system with two backlog costs in response to a discount offer
AU - Al Kindi, Mahmood
AU - Sarker, Bhaba R.
N1 - Funding Information:
Yates Distinguished Professor of Engineering at the Louisiana State University. Before joining LSU, he worked with several organisations and taught at UT-Austin and Texas A&M University. Prof Sarker has published more than 100 papers in refereed journals, and more than 70 papers in conference proceedings. He is a Fellow of the Institute of Industrial Engineers (USA). He won the 2006 David F. Baker Distinguished Research Award for outstanding research in Industrial Engineering. He is currently on the editorial boards of European Journal of Operational Research, Production Planning and Control, Journal of Production Research, International Journal of Production Economics, International Journal of Pure and Applied Mathematical Sciences and Journal of Applied Mathematics and Decision Sciences. Dr. Sarker is a member of ASEE, DSI, IIE, INFORMS and New York Academy of Sciences, and his research was funded by NSF, ONR, USAE and NASA. He is currently working in the area of cellular/flexible manufacturing, supply chain and lean production systems.
PY - 2011/4
Y1 - 2011/4
N2 - Apparel manufacturing industries face seasonal discount scenarios where the demand for a certain material type is increasing at a specific time, such as wool during wintertime. Suppliers offer a price discount per unit during a period in order to increase the cash flow or decrease the inventory of certain items. The buyer (manufacturer, retailer, etc.) must improve his inventory systems in order to get the maximum benefit during that sale period. It is essential to combine the scenario with shortage and the supplier's offer during a sale period. Most researches maximise the total discount gain only during the sale period, not the whole year as in this research. The two important keys in an inventory system are the special ordering quantity and the time to place the order. In this article, the optimal value of the special quantity and the time to order are found for different discount cases. Moreover, the effect of on-hand inventory and shortage level on the size of the special order is investigated. A sensitivity analysis is conducted to test the performance of the case when the buyer cannot order the optimal special quantity. Finally, a numerical analysis is used to demonstrate the impact of these factors.
AB - Apparel manufacturing industries face seasonal discount scenarios where the demand for a certain material type is increasing at a specific time, such as wool during wintertime. Suppliers offer a price discount per unit during a period in order to increase the cash flow or decrease the inventory of certain items. The buyer (manufacturer, retailer, etc.) must improve his inventory systems in order to get the maximum benefit during that sale period. It is essential to combine the scenario with shortage and the supplier's offer during a sale period. Most researches maximise the total discount gain only during the sale period, not the whole year as in this research. The two important keys in an inventory system are the special ordering quantity and the time to place the order. In this article, the optimal value of the special quantity and the time to order are found for different discount cases. Moreover, the effect of on-hand inventory and shortage level on the size of the special order is investigated. A sensitivity analysis is conducted to test the performance of the case when the buyer cannot order the optimal special quantity. Finally, a numerical analysis is used to demonstrate the impact of these factors.
KW - backlog
KW - discount offer
KW - optimal order quantity
KW - sale period
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U2 - 10.1080/09537287.2010.498613
DO - 10.1080/09537287.2010.498613
M3 - Article
AN - SCOPUS:79952655268
SN - 0953-7287
VL - 22
SP - 325
EP - 333
JO - Production Planning and Control
JF - Production Planning and Control
IS - 3
ER -