Journal
ASIA-PACIFIC JOURNAL OF OPERATIONAL RESEARCH
Volume 21, Issue 4, Pages 435-446Publisher
WORLD SCIENTIFIC PUBL CO PTE LTD
DOI: 10.1142/S0217595904000321
Keywords
inventory; lot sizing; stock-dependent demand; deterioration
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In this paper, we discuss why it is appropriate maximize the profits, instead of minimizing the costs, in an inventory system with an inventory-level-dependent demand rate. In addition, we restate Urban's viewpoint that the restriction of zero ending-inventory is not necessary in an inventory-level-dependent demand model. Consequently, we amend Giri and Chaudhuri's inventory model for deteriorating items by changing the objective to maximize the profits and relaxing the restriction of zero ending-inventory. Finally, we provide a couple of examples to show that both the order quantity and the profit obtained from our proposed model are significantly larger than those in Giri and Chaudhuri's model, in which the objective is to minimize the costs.
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