A production-inventory model with stochastic lead time and JIT set up cost
by Ruchira Chakrabarty; Tapan Roy; Kripasindhu Chaudhuri
International Journal of Operational Research (IJOR), Vol. 33, No. 2, 2018

Abstract: We developed this inventory model under price dependent demand in stochastic environment. Here probabilistic lead time is considered and shortages are allowed (if occur) over a finite time horizon. Generalising the work of Maiti et al. (2009) more precisely, we consider this model with just-in-time set up cost where deterioration is taken into account and backlogging rate has been considered as a negative exponential function of the waiting time. Taking all these into account, mathematical expression for expected average profit is derived. A closed form of analytic solution for maximising the expected average profit function is obtained when demand is constant. Numerical examples are carried out to identify the most sensitive parameter.

Online publication date: Tue, 02-Oct-2018

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