An order-revenue inventory model with returns and sudden obsolescence

Yonit Barron

doi:10.1016/j.orl.2017.11.005

An order-revenue inventory model with returns and sudden obsolescence

Yonit Barron

Department of Industrial Engineering and Management

Ariel University

Research output: Contribution to journal › Article › peer-review

Abstract

This paper introduces an EOQ-like state-dependent inventory model with returns and sudden obsolescence. Returns arrive according to a MAP process governed by the underlying Markov chain. Additionally, the system is totally obsoleted at stationary renewal times. Hitting level 0 yields an order of size Q. We assume order, loss, and shortage costs in addition to revenue. By applying hitting-time transforms and martingales we derive the cost functionals under the discounted criterion. Numerical results, insights, and a comparative study are provided.

Original language	English
Pages (from-to)	88-92
Number of pages	5
Journal	Operations Research Letters
Volume	46
Issue number	1
DOIs	https://doi.org/10.1016/j.orl.2017.11.005
State	Published - Jan 2018

Keywords

Economic-order-quantity
Inventory model
MAP process
Obsolescence
Phase-type distribution
Returns

All Science Journal Classification (ASJC) codes

Software
Management Science and Operations Research
Industrial and Manufacturing Engineering
Applied Mathematics

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10.1016/j.orl.2017.11.005

Cite this

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abstract = "This paper introduces an EOQ-like state-dependent inventory model with returns and sudden obsolescence. Returns arrive according to a MAP process governed by the underlying Markov chain. Additionally, the system is totally obsoleted at stationary renewal times. Hitting level 0 yields an order of size Q. We assume order, loss, and shortage costs in addition to revenue. By applying hitting-time transforms and martingales we derive the cost functionals under the discounted criterion. Numerical results, insights, and a comparative study are provided.",

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AB - This paper introduces an EOQ-like state-dependent inventory model with returns and sudden obsolescence. Returns arrive according to a MAP process governed by the underlying Markov chain. Additionally, the system is totally obsoleted at stationary renewal times. Hitting level 0 yields an order of size Q. We assume order, loss, and shortage costs in addition to revenue. By applying hitting-time transforms and martingales we derive the cost functionals under the discounted criterion. Numerical results, insights, and a comparative study are provided.

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KW - Obsolescence

KW - Phase-type distribution

KW - Returns

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JO - Operations Research Letters

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ER -

An order-revenue inventory model with returns and sudden obsolescence

Abstract

Keywords

All Science Journal Classification (ASJC) codes

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