An integrated inventory model involving discrete setup cost reduction, variable safety factor, selling price dependent demand, and investment

Bikash Koli Dey, Biswajit Sarkar, Mitali Sarkar, Sarla Pareek

Research output: Contribution to journalArticle

12 Citations (Scopus)

Abstract

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.

Original languageEnglish
Pages (from-to)39-57
Number of pages19
JournalRAIRO - Operations Research
Volume53
Issue number1
DOIs
Publication statusPublished - 2019 Jan 1

All Science Journal Classification (ASJC) codes

  • Theoretical Computer Science
  • Computer Science Applications
  • Management Science and Operations Research

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