A minimax distribution free procedure for mixed inventory model with backorder discounts and variable lead time

An integrated vendor–buyer inventory model with backorder price discount and effective investment to reduce ordering cost

“…This means that we should endeavor to generate high customer loyalty so that the customers would like to accept backorders. The factor is an offering of a price discount from the buyer to customers (see, Chuang et al, 2004;Ouyang, Chuang, & Lin, 2007b;Pan & Hsiao, 2001). In general, provided that a buyer could offer a price discount on the stockout item by negotiation to secure more backorders, it may make the customers more willing to wait for the desired items.…”

A stochastic periodic review integrated inventory model involving defective items, backorder price discount, and variable lead time

“…Besides, there is a potential factor that may motivate customers' preference for backorders. The factor is an offering of a price discount from the retailer to the customers (see, Pan and Hsiao 2001;Chuang et al 2004, andOuyang et al 2007c). In the practical situation, the retailer could offer a price discount on the stockout item by negotiation to secure more backorders; it may make the customers more willing to wait for the desired items.…”

Price discounts for increased profitability under partial backordering

“…In closely related papers, Ho et al (2007), Pan and Hsiao (2005), and Pan et al (2004) modeled a classic reorder point system in which the fraction of demand during the out-of-stock period that will be backordered is proportional to the size of the price discount. Similar to these are papers by Lin (2008) and Chuang et al (2004) that assumed that the lead-time demand is distribution free. Ouyang et al (2003) looked at similar issues when the inventory control policy is periodic review.…”

“…While it is possible to specify any functional form for β ( d ) that is non‐decreasing in the value of d , most of the previous studies that have considered the issue of incorporating a discount during the stockout period as a way of decreasing lost sales and increasing profits have used the simplest such form – linear (see, e.g., Chuang et al, 2004; Ho et al, 2007; Lin, 2008; Ouyang et al, 2003; Pan and Hsiao, 2005; Pan et al, 2004). The approach taken by all of these authors is that the value of β for a given discount is simply the maximum value of β multiplied by the amount of the discount divided by the maximum allowable discount, which is the unit profit.…”