Title: On price increases and temporary price reductions with partial backordering

Authors: Sanjay Sharma

Addresses: National Institute of Industrial Engineering (NITIE), Vihar Lake, Mumbai 400087, India

Abstract: In the previous researches, a generalised production-inventory model is considered along with partial backordering, i.e., the situation when a fraction of shortage quantity is not backordered. The work is extended for the case where any supplier offers a short-term price discount. An optimum special order quantity and the potential cost savings are obtained for different possible stock status at the time of replenishment of a special large order size. Similarly, the case in which a price increase is declared by the manufacturers/suppliers is incorporated in the model. Numerical examples are provided in order to illustrate the formulation along with the sensitivity analysis. [Received 11 December 2007; Revised 21 February 2008; Second Revision 04 March 2008; Accepted 06 May 2008]

Keywords: production-inventory model; partial backordering; temporary price reductions; price increases; short-term price discounts.

DOI: 10.1504/EJIE.2009.021585

European Journal of Industrial Engineering, 2009 Vol.3 No.1, pp.70 - 89

Published online: 30 Nov 2008 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article