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An inventory model where backordered demand ratio is exponentially decreasing with the waiting time

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Abstract

We analyze an inventory system with a mixture of backorders and lost sales, where the backordered demand rate is an exponential function of time the customers wait before receiving the item. Stockout costs (backorder cost and lost sales cost) include a fixed cost and a cost proportional to the length of the shortage period. A procedure for determining the optimal policy and the maximum inventory profit is presented. This work extends several inventory models of the existing literature.

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Authors and Affiliations

  1. Departamento de Estadística, Investigación Operativa y Computación, Facultad de Matemáticas, Universidad de La Laguna, 38271, La Laguna (Tenerife), Spain

    Joaquín Sicilia

  2. Departamento de Matemática Aplicada, Universidad de Valladolid, Valladolid, Spain

    Luis A. San-José

  3. Departamento de Estadística e Investigación Operativa, Universidad de Valladolid, Valladolid, Spain

    Juan García-Laguna

Authors
  1. Joaquín Sicilia
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  2. Luis A. San-José
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  3. Juan García-Laguna
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Correspondence to Joaquín Sicilia.

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Sicilia, J., San-José, L.A. & García-Laguna, J. An inventory model where backordered demand ratio is exponentially decreasing with the waiting time. Ann Oper Res 199, 137–155 (2012). https://doi.org/10.1007/s10479-011-0944-x

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