Volume 53, Number 1, January–March 2019
|Page(s)||39 - 57|
|Published online||21 January 2019|
An integrated inventory model involving discrete setup cost reduction, variable safety factor, selling price dependent demand, and investment
Department of Mathematics & Statistics, Banasthali Vidyapith,
2 Production Engineering & Operations Management Laboratory, Department of Industrial & Management Engineering, Hanyang University, Ansan Gyeonggi-do 15588, South Korea
* Corresponding author: firstname.lastname@example.org
Accepted: 31 January 2018
This paper develops a sustainable integrated inventory model for maximizing profit with a controllable lead time, discrete setup cost reduction, and consideration of environmental issues. Contrary to the available literature, this paper considers a discrete setup cost for the vendor, thus making the integrated model sustainable. The customer’s demand is assumed to be selling-price dependent to increase the number of sales, and the lead time demand follows a Poisson distribution. The integrated model is used to optimized the total shipment number, volume of shipments, safety factor, investments, selling-price, and probability of moving between the “in-control” to “out-of-control” states. An algorithm is developed to obtain the numerical results. Numerical examples and sensitivity analyses are given to illustrate the model.
Mathematics Subject Classification: 90B05 / 90B06
Key words: Discrete setup cost reduction / Poisson distributed leadtime / variable safety factor / selling-price-dependent demand / shortage
© EDP Sciences, ROADEF, SMAI 2019
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