An Inventory Model with Planned Shortages and Price Dependent Demand

An Inventory Model with Planned Shortages and Price Dependent Demand

ABSTRACT Previous research has yielded a procedure for a retailer to determine the optimal lot size and selling price when a supplier offers all‐unit quantity discounts and demand is a decreasing function of price. In this paper, we extend that research by allowing for shortages. An algorithm is pre...

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Veröffentlicht in:Decision sciences 1991-11, Vol.22 (5), p.1187-1191
Hauptverfasser: Burwell, Timothy H., Dave, Dinesh S., Fitzpatrick, Kathy E., Roy, Melvin R.
Format: Artikel
Sprache:eng
Schlagworte:
Demand
Distribution channels
Effects
Inventory management
Inventory Management and Pricing
Operations research
Pricing policies
Shortages
Studies
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Beschreibung
Zusammenfassung:ABSTRACT Previous research has yielded a procedure for a retailer to determine the optimal lot size and selling price when a supplier offers all‐unit quantity discounts and demand is a decreasing function of price. In this paper, we extend that research by allowing for shortages. An algorithm is presented that determines the optimal lot size, order level, and selling price for a class of demand functions, including the constant price‐elasticity and linear demand functions.
ISSN:0011-7315
1540-5915
DOI:10.1111/j.1540-5915.1991.tb01916.x