A general model for EOQ inventory systems with partial backlogging and linear shortage costs

Abstract

We present a mathematical model which generalises several known deterministic Economic Order Quantity (EOQ) inventory systems with partial backlogging. This inventory model considers purchasing cost, holding cost, shortage costs and replenishment cost. Shortage costs (backorder cost and lost sales cost) are both made up of a fixed cost and a variable cost which depends on the length of the waiting time for the next replenishment. The optimal policy is characterised through a sequential optimisation procedure. To illustrate the model, numerical examples and sensitivity results are given.

Keywords:

• inventory systems
• EOQ models
• shortages
• partial backlogging

Acknowledgements

This work is partially supported by the Spanish Ministry of Education and Science, Research Project MTM2007-60928, from the National Plan of Scientific Research, Technological Development and Innovation. Also, this work is partially supported by the project OTP/07/02 of the Regional Government of the Castilla and León Community (Spain).