Inventory and pricing model with price-dependent demand, time-varying holding cost, and quantity discounts

Alfares, Hesham K.; Ghaithan, Ahmed M.

doi:10.1016/j.cie.2016.02.009

Cited by 146 publications

(69 citation statements)

References 33 publications

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“…Pal et al [22] developed an imperfect production, inventory model with two cycles where demand decreases quadratic ally with respect to the selling price. Alfares et al [5] developed an inventory model with price dependent demand. In that model holding cost was taken to be a linear increasing function of storage time and the purchased cost was a decreasing step function of order size.…”

Section: Literature Surveymentioning

confidence: 99%

Two phases inventory model with variable cycle length under discount policy

Pal

Adhikari

2020

RAIRO-Oper. Res.

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This study deals with single stage inventory model where two phases are involved in an inventory cycle. In the first phase of the cycle, demand depends on both of inventory level and selling price while in the second, the demand depends on price only. Discount policy in selling price is offered in the second phase and inventory level at the end of the cycle is taken to be zero. Two models have been constructed on infinite time horizon. In the first model the demand rate is taken as the sum of two linear functions of inventory level and selling price and, in the second model, it is taken as a product of two power functions of inventory level and selling price. Our objective is to maximize average profit by considering ordering lot size and selling price as decision variables. Numerical examples of each model have been provided. The optimality criteria for the solutions are also checked by both graphically and numerically. Sensitivity analysis for different parameters in both models has been discussed in details to check the feasibility of the models.Mathematics Subject Classification. 90B05.

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Section: Literature Surveymentioning

confidence: 99%

Two phases inventory model with variable cycle length under discount policy

Pal

Adhikari

2020

RAIRO-Oper. Res.

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“…According to the assumption for attaining a discount on the purchase of material, the term s ∑ r=1 (L r M r + Ld r Md r + Ldd r Mdd r ) in Equation (1) represent the total direct material costs with (r ∈ D) and without (r ∈ D) a purchase discount. The material cost function with a purchase quantity discount is shown in Figure 6 [53][54][55][56]. There are three ranges of material purchase quantities, [0,TD r ], (TD r ,W r ], and (W r ,X r ], in which the unit costs are L r , Ld r , and Ldd r , respectively, and L r < Ld r < Ldd r .…”

Section: Total Direct Materials Costmentioning

confidence: 99%

A Green Quality Management Decision Model with Carbon Tax and Capacity Expansion under Activity-Based Costing (ABC)—A Case Study in the Tire Manufacturing Industry

Tsai

2018

Energies

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Issues related to global environmental protection are highly important. Under the global trend of energy saving and carbon reduction, in order to lower the carbon emissions of products or services offered by enterprises, the Taiwanese government aims to control carbon emissions by constructing a carbon tax system and mandating enterprises to pay a carbon tax. The collection of a carbon tax can minimize the total social environmental cost and increase the efficiency of carbon reduction; the need to control the green quality cost can serve as a criterion of green management decision-making. This study aimed to reorganize carbon emissions in different stages of production in order to lower the total carbon emissions of products. Activity-based costing (ABC) was adopted to assess green quality management and production cost. The optimal green quality production portfolio was selected via a mathematical programming model to focus on the expansion of productivity and outsourcing strategy in order to effectively lessen the harmful effects on the environment and maximize profits. Besides academic contributions, the findings of this study could serve as a reference to enterprises on assessing the effects of carbon emissions, carbon taxes, and environmental management on production decision-making.Green Quality Management mainly aims at eco-efficiency in the complete product life cycle, including design, raw material selection, process improvement, prevention and treatment of pollution, after-sales services and waste recycling, and processing. Quality cost measurement is the first step of quality cost management. Several researchers have proposed various methods to measure the cost of quality (COQ), which includes prevention, appraisal, internal failure, and external failure costs [4]. The Activity-Based Costing (ABC) approach has been widely used in measuring COQ [5-9] because many COQ elements are activity-related costs [9]. ABC uses a two-stage cost assignment to compute the costs of activities in the first stage and the costs of the objects in the second stage [10]. Thus, activity costs can be achieved in the first stage and sources of activity costs can be traced in the second stage of ABC cost assignment. ABC divides activities into value-added (VA) and non-value-added (NVA) activities. The purpose of green quality management is to reduce the workload of VA activities and to finally eliminate the execution of NVA activities related to COQ.The theory of constraints (TOC), proposed by Goldratt in the book titled "The Goal" [11], aims to identify the constraints and managing them. There are several constraints in business operations, and TOC uses five steps to identify and eliminate the bottlenecks one by one to increase business performance. One method is capacity expansion with a fixed capital investment to increase the possible sales and profits.Carbon taxes aim to reduce carbon emissions, and they offer a potentially cost-effective means of reducing greenhouse gas emissions [12]. Carbon taxes are also an important p...

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“…() considered a dual supply chain for a product whose unit cost reduces during its lifetime. Alfares and Ghaithan () established an inventory model considering three important assumptions, such as price‐dependent demand, time‐varying holding cost, and price discounts, and derived a solution procedure to find the optimal solutions. Taleizadeh et al.…”

Section: Introductionmentioning

confidence: 99%

Price discount facility in an EOQ model for deteriorating items with stock‐dependent demand and partial backlogging

Shaikh

Khan

Panda³

et al. 2019

Int Trans Operational Res

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All-units discount facilities are one of the attractive features in the competitive business situation. Due to the globalization of the marketing policy, all-units discount facilities play an important role in the competitive business. Typical economic order quantity (EOQ) models are cloistered by considering as constant not only the purchase cost (irrespective of the order size of the product) but also the carrying cost during the entire cycle period. However, the unit purchase cost has an antagonistic relationship with the order size, and the carrying cost has a commensurate relationship with the storage time-period of the product, that is, the higher the order size, the lower the unit purchase cost, and the longer the storage time-period, the greater carrying cost per unit. Also deterioration is another imperative issue in inventory analysis as it has a huge impact on profit or cost of the inventory system. Considering all of the above-mentioned factors, we study two different inventory models, namely (a) inventory model for zero-ending case and (b) inventory model for shortages case. The demand for both models is considered as price and stock dependent, whereas shortages are partially backlogged at a rate with the length of the waiting time to the arrivals of the next lot. The existence and uniqueness of the optimal solution for both models are examined theoretically and the solution procedures are discussed along with two proposed algorithms for minimizing the total cost. Finally, we perform sensitivity analyses for both models and make a fruitful conclusion regarding the proposed work.

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Inventory and pricing model with price-dependent demand, time-varying holding cost, and quantity discounts

Cited by 146 publications

References 33 publications

Two phases inventory model with variable cycle length under discount policy

Two phases inventory model with variable cycle length under discount policy

A Green Quality Management Decision Model with Carbon Tax and Capacity Expansion under Activity-Based Costing (ABC)—A Case Study in the Tire Manufacturing Industry

Price discount facility in an EOQ model for deteriorating items with stock‐dependent demand and partial backlogging

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