Title: Economic order quantity model on inflationary conditions with demand influenced by innovation diffusion criterion

Authors: Udayan Chanda; Alok Kumar

Addresses: Department of Information & Industrial Engineering, Yonsei University, 134 Shinchon-dong, Seoul 120-749, Korea. ' Department of Operational Research, Faculty of Mathematical Sciences, University of Delhi, Delhi 110007, India

Abstract: In this paper, an inventory model has been proposed based on the explicit assumptions of interaction of marketing parameters to the optimal inventory replenishment policy. This study applies the discounted cash flow (DCF) approach for the analysis of the replenishment problem over a finite planning horizon. The demand rate is a function of time and is assumed to be driven by innovation diffusion process. In addition, a numerical example is performed justifying the need of incorporating the effect of innovation along with the effect of inflation on the optimal inventory replenishment. Sensitivity analysis is also performed to discuss the effectiveness of the proposed framework.

Keywords: innovation diffusion; inflation; discounted cash flow; DCF; economic order quantity; EOQ; inventory modelling; marketing; inventory replenishment policy.

DOI: 10.1504/IJPM.2012.045648

International Journal of Procurement Management, 2012 Vol.5 No.2, pp.160 - 177

Published online: 16 Aug 2014 *

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