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An inventory model with partial backordering and unit backorder cost linearly increasing with the waiting time
Journal article   Peer reviewed

An inventory model with partial backordering and unit backorder cost linearly increasing with the waiting time

Wan-ting Hu, Seung-Lae Kim and Avijit Banerjee
European journal of operational research, v 197(2), pp 581-587
01 Sep 2009
DOI: https://doi.org/10.1016/j.ejor.2008.06.041
Featured in Collection :   UN Sustainable Development Goals @ Drexel

Abstract

Business & Economics Management Operations Research & Management Science Science & Technology Social Sciences Technology
As the implementation of JIT practice becomes increasingly popular, each echelon in a supply chain tends to carry fewer inventories, and thus the whole supply chain is made more vulnerable to lost sales and/or backorders. The purpose of this paper is to recast the inventory model to be more relevant to current situations, where the penalty cost for a shortage occurrence at a downstream stage in a supply chain is continually transmitted to the upstream stages. The supplier, in this case, at the upstream of the supply chain is responsible for all the downstream shortages due to the chain reaction of its backlog. The current paper proposes a model in which the backorder cost per unit time is a linearly increasing function of shortage time, and it claims that the optimal policy for the supplier is setting the optimal shortage time per inventory cycle to minimize its total relevant cost in a JIT environment. (C) 2008 Elsevier B.V. All rights reserved.

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24 citations in Web of Science
29 citations in Scopus

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UN Sustainable Development Goals (SDGs)

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#12 Responsible Consumption & Production

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Web of Science research areas
Management
Operations Research & Management Science
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