A periodic review inventory model with stock dependent demand, permissible delay in payment and price discount on backorders

In this paper we study a periodic review inventory model with stock dependent demand. When stock on hand is zero, the inventory manager offers a price discount to customers who are willing to backorder their demand. Permissible delay in payments allowed to the inventory manager is also taken into account. Numerical examples are cited to illustrate the model

An EOQ model for time-dependent deteriorating items with alternating demand rates allowing shortages by considering time value of money

The present paper deals with an economic order quantity (EOQ) model of an inventory problem with alternating demand rate: (i) For a certain period, the demand rate is a non linear function of the instantaneous inventory level. (ii) For the rest of the cycle, the demand rate is time dependent. The time at which demand rate changes, may be deterministic or uncertain. The deterioration rate of the item is time dependent. The holding cost and shortage cost are taken as a linear function of time. The total cost function per unit time is obtained. Finally, the model is solved using a gradient based non-linear optimization technique (LINGO) and is illustrated by a numerical example

A replenishment policy for a perishable inventory system based on estimated aging and retrieval behavior

So far the literature on inventory control for perishable products has mainly focused on (near-) optimal replenishment policies for a stylized environment, assuming no leadtime, no lot-sizing, stationary demand, a first in first out retrieval policy and/or product life time equal to two periods. This literature has given fundamental insight in the behavior and the complexity of inventory systems for perishable products. In practice, many grocery retailers have recently automated the inventory replenishment for non-perishable products. They recognize they may need a different replenishment logic for perishable products, which takes into account e.g. the age of the inventory in the system. Due to new information technologies like RFID, it now also becomes more economically feasible to register this type of information. This paper suggests a replenishment policy for perishable products which takes into account the age of inventories and which requires only very simple calculations. It will be shown that in an environment, which contains important features of the real-life retail environment, this new policy leads to substantial cost reductions compared with a base policy that does not take into account the age of inventories

Joint Pricing and Inventory Control for Non-instantaneous Deteriorating Items with Stochastic Demand

In recent years inventory and pricing of deteriorating items has gained an enormous attention by many researchers. In this study, an inventory system for non-instantaneous deteriorating items with stochastic demand is modeled. This model has the assumptions that shortages are allowed and backlogging rate is variable where the last one is defined as a function of waiting time for the next replenishment. The objective is to maximize the total profit per unit time by finding the optimal selling price and replenishment schedule simultaneously. The concavity of the function is proved with a unique optimal solution. Thereby we provide an algorithm for finding the optimal solution. Finally, the authors present a numerical example to illustrate the theoretical results. A sensitivity analysis for the optimal solution with respect to major parameters is also carried out

A Joint Order Inventory Model with Permissible Delay in Payment in Pharmaceutical Supply Chain (Case Study: Blambangan Banyuwangi Public Hospital)

Healthcare is one of the sectors in which Indonesia’s spending is yearly increasing towards Gross Domestic Product. Its highest contributor, pharmaceutical spending, is known also to increase up to 2017, showing +10.2% growth in IDR currency terms. In addition, it shows an increase in forecast trend projected up to 2021 according to Business Monitor International (BMI) Research. The fact that pharmaceutical spending contributes high to total hospital expenditure in specific and has to hold critically vital products, urged the pharmacy to continuously provide excellent service to the patient. Blambangan Banyuwangi Public Hospital (RSUD Blambangan) is one of regional public service hospital or BLUD (Badan Layanan Umum Daerah) since 2009. This hospital had just received B-class certification on February 2017. Looking at its hospital pharmacy which contributes up to around 60% of the total hospital revenue, observation and evaluation are worth taking place on its pharmaceutical inventory management. This research is aimed to evaluate current inventory management and to observe the impact of delay in payment using joint order policy and periodic review to some of the A-class pharmaceutical products, from the ABC classification, in RSUD Blambangan. This aim is obtained from the finding that the hospital has a tendency to postpone the order payment to the supplier and it is permitted by the supplier. In addition, the pharmacy depot intuitively determined its review period in its inventory. The ignored permissible delay in payment is the key consideration of this research to be compared to the current inventory management by modifying general total inventory cost equation as well as proposing the periodic review policy. The expected results are a recommendation on Economic Order Interval (EOI) for each scenario (initial condition, consider EOI only, and consider both EOI and delay in payment). It will also analyze each scenario performance gap to know when and which to apply. The current best scenario seen from financial aspects in regards to the least total inventory cost is considering EOI only without the delay in payment. However, the gap towards that of considering both factors is very little depicted by one and two-way sensitivity analysis. ====================================================================================================== Healthcare adalah salah satu sektor dengan tingkat belanja tahunan yang meningkat dalam Produk Domestik Bruto. Kontributor tertingginya, belanja farmasi, diketahui juga meningkat hingga 2017, menunjukkan pertumbuhan + 10.2% dalam mata uang Rupiah. Selain itu, tren ramalannya pun diproyeksikan meningkat hingga 2021 oleh Business Monitor International (BMI) Research. Fakta bahwa farmasi berkontribusi tinggi terhadap total pengeluaran rumah sakit dan memiliki otoritas mengatur alat serta obat sebagai produk yang sangat penting availabilitasnya, mendesak apotek untuk terus memberikan pelayanan yang terbaik kepada pasien. Rumah Sakit Umum Blambangan Banyuwangi (RSUD Blambangan) adalah salah satu Badan Layanan Umum Daerah (BLUD) sejak tahun 2009. Rumah sakit ini baru saja menerima sertifikasi kelas B pada Februari 2017. Observasi dan evaluasi layak dilakukan pada manajemen inventori farmasi melihat depo farmasi rumah sakit yang berkontribusi hingga sekitar 60% terhadap total pendapatan rumah sakit. Penelitian ini bertujuan untuk mengevaluasi manajemen persediaan aktual dan untuk mengamati dampak keterlambatan pembayaran (delay in payment) menggunakan kebijakan pesanan bersama (joint order) dan peninjauan periodik untuk beberapa produk farmasi kelas A, dari klasifikasi ABC, di RSUD Blambangan. Tujuan ini diperoleh dari temuan bahwa rumah sakit memiliki kecenderungan menunda pembayaran pesanan kepada pemasok dan hal tersebut diizinkan. Selain itu, depo farmasi secara intuitif menentukan periode review dalam inventarisnya. Penundaan pembayaran yang diabaikan adalah fokus utama penelitian ini untuk dibandingkan dengan manajemen inventaris actual dengan memodifikasi persamaan total biaya persediaan serta mengusulkan kebijakan peninjauan periodik. Hasil yang diharapkan adalah rekomendasi pada Economic Order Interval (EOI) untuk setiap skenario (kondisi aktual, mempertimbangkan EOI, dan mempertimbangkan EOI serta penundaan pembayaran). Gap kinerja antar skenario juga akan dianalisis untuk mengetahui kapan dan skenario mana yang akan diterapkan. Skenario terbaik dari aspek keuangan terkait biaya persediaan paling kecil adalah mempertimbangkan EOI tanpa penundaan pembayaran. Namun, selisih dengan skenario yang mempertimbangkan dua faktor cukup sedikit, digambarkan oleh analisis sensitivitas satu dan dua-arah

Modelos de Inventarios con Productos Perecederos: Revisión de la Literatura

This paper presents a review of the main characteristics of the mathematical modelsdeveloped by the scientific community in order to determine an optimal inventory policyfor deteriorating items. Thus, a classified bibliography of 390 articles published from2001 to 2014 in high-impact journals is submitted while considering the type of demandand deterioration, the integration of inventory and pricing decisions, the inclusionof shortage and/or the time value of money, the consideration of multiple items and/ormulti-echelon systems, and the incorporation of uncertain parameters other than demand.Finally, research questions not yet addressed by the research community in the field ofinventory control for deteriorating items are pointed out.En el presente artículo se lleva a cabo una revisión de las principales características estudiadas por la comunidad científica en el desarrollo de modelos matemáticos que buscan definir una política de inventario óptima para productos que se deterioran. De este modo, se referencian 390 artículos publicados a partir del año 2001 en revistas de gran impacto, teniendo en cuenta: el tipo de demanda y deterioro representado en los modelos matemáticos, el estudio de una política de precio óptima, la inclusión de faltantes y/o valor del dinero en el tiempo, el estudio de múltiples productos y/o dos o más eslabones de la cadena de suministro, y la utilización de parámetros o variables difusas. Finalmente, se identifican oportunidades de investigación que a la fecha no han sido abordadas por la comunidad científica en este campo del conocimiento

A fuzzy multi objective inventory model of demand dependent deterioration including lead time

In this article, we have developed a deteriorated multi-item inventory model in a fuzzy environment. Here the demand rate is constant. Production cost and set-up cost are the most vital issue in the inventory system of the market world. Here production cost and set-up- cost are continuous functions of demand. Set-up-cost is also dependent on average inventory level. Deterioration cost is the most challenging issue in the business world. So here deterioration cost is dependent on inventory level and demand. Lead time crashing cost is considered the continuous function of leading time. In the real world all cost are not fixed. Due to uncertainty all cost parameters of the proposed model are taken as Generalized Triangular Fuzzy Number (GTFN). The formulated multi objective inventory problem has been solved by various techniques like as Geometric Programming (GP) technique, Fuzzy Programming Technique with Hyperbolic Membership Function (FPTHMF), Fuzzy Non-Linear Programming (FNLP) technique. Numerical example is taken to illustrate the model. Sensitivity analysis and graphical representation have been shown to test the parameters of the model

Three-Echelon Inventory Model with Permissible Delay in Payments under Controllable Lead Time and Backorder Consideration

This paper proposes a three-echelon inventory model with permissible delay in payments under controllable lead time and backorder consideration to find out the suitable inventory policy to enhance profit of the supply chain. In today’s highly competitive market, the supply chain management has become a critical issue in both practice and academic and supply chain members have to cooperate with each other to bring more benefits. In addition, the inventory policy is a key factor to influence the performance of the supply chain. Therefore, in this paper, we develop a three-echelon inventory model with permissible delay in payments under controllable lead time and backorder consideration. Furthermore, the purpose of this paper is to maximize the joint expect total profit on inventory model and attempt to discuss the inventory policy under different conditions. Finally, with a numerical example provided here to illustrate the solution procedure, we may discover that decision-makers can control lead time and payment time to enhance the performance of the supply chain

Efficient inventory control for imperfect quality items

In this paper, we present a general EOQ model for items that are subject to inspection for imperfect quality. Each lot that is delivered to the sorting facility undertakes a 100 per cent screening and the percentage of defective items per lot reduces according to a learning curve. The generality of the model is viewed as important both from an academic and practitioner perspective. The mathematical formulation considers arbitrary functions of time that allow the decision maker to assess the consequences of a diverse range of strategies by employing a single inventory model. A rigorous methodology is utilised to show that the solution is a unique and global optimal and a general step-by-step solution procedure is presented for continuous intra-cycle periodic review applications. The value of the temperature history and flow time through the supply chain is also used to determine an efficient policy. Furthermore, coordination mechanisms that may affect the supplier and the retailer are explored to improve inventory control at both echelons. The paper provides illustrative examples that demonstrate the application of the theoretical model in different settings and lead to the generation of interesting managerial insights