On an EOQ model for deteriorating items with time-varying demand and partial backlogging

Abstract

For seasonal products, fashionable commodities and high-tech products with a short product life cycle, the willingness of a customer to wait for backlogging during a shortage period is diminishing with the length of waiting time. Recently, Chang and Dye developed an inventory model in which the backlogging rate declines as the waiting time increases. In this paper, we complement the shortcoming of their model by adding the non-constant purchase cost into the model. In addition, we show that the total cost is a convex function of the number of replenishments. We further simplify the search process by providing an intuitively good starting value, which reduces the computational complexity significantly. Finally, we characterize the influences of the demand patterns over the replenishment cycles and others.

Keywords:

• inventory
• lot sizing
• shortages
• partial backlogging
• deterioration

Acknowledgements

The authors gratefully acknowledge the very helpful comments of the Editor, and the two anonymous referees. This research was partially supported by the National Science Council of the Republic of China under Grant NSC-90-2416-H-032-017, and a 2-month research grant in 2002 by the Graduate Institute of Management Sciences in Tamkang University. The first author's research was also supported by the Assigned Released Time for Research and a Summer Research Funding from the William Paterson University of New Jersey.