Optimal replenishment policy for items with three-parameter Weibull deterioration, stock-level dependent demand and partial backlogging
DOI:
https://doi.org/10.2298/YJOR151120019SKeywords:
inventory model, stock-dependent demand, differential equation, optimal policy, hazard functionAbstract
Our focus in this paper is on determining an optimal replenishment policy for items with three-parameter Weibull distribution deterioration and inventory-level dependent demand. We developed and analyzed the model under the assumption of partial backlogging. The three-parameter Weibull hazard rate captures the impact of already deteriorated items that are received into the inventory, as well as those items that may start deteriorating in future. The inventory-level demand reflects a real market demand for product whose sales is enhanced by stock on display. We study a case base examples to gain some quantitative insight into the proposed model and we perform sensitivity analysis to draw some managerial implications.References
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