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2013 (Vol. 5, Issue: 05)
Article Information:

Lead Time Reduction in Budget and Storage Space Restricted Lot Size Reorder Point Inventory Models with Controllable Negative Exponential Backorder Rate

A. Gholami-Qadikolaei, M.A. Sobhanallahi and A. Mirzazadeh
Corresponding Author:  A. Mirzazadeh 

Key words:  Chance-constrained programming technique, inventory constraints, inventory system, lead time, partial backlogging, stochastic,
Vol. 5 , (05): 1557-1567
Submitted Accepted Published
July 07, 2012 August 08, 2012 February 11, 2013

This study presents the mixed backorder and lost sales inventory models involving four variables; order quantity, lead time, safety factor (a discrete variable) and backorder rate. A controllable negative exponential backorder rate is considered in the proposed model. In the real market, as unsatisfied demands occur, the longer length of lead time is, the smaller proportion of backorder rate would be. Considering this reason, backorder rate is dependent on the length of lead time through the amount of shortages. The negative exponential lead time crashing cost is considered in this study. Today, the cost of land acquisition is high in most of the countries and one of the main concerns of inventory managers is to ensure that the maximum permissible storage space is enough when an order arrives. Hence, a random storage space constraint is considered, since, the inventory level is random when an order arrives. So, in this case, a chance-constrained programming technique is used to make it crisp. Moreover, another significant concern of inventory managers is how to control the maximum investment in the inventory. This study assumes the purchasing cost is paid at the time of order placing. Considering this assumption, a budget constraint is also added to the model in order to managing the maximum inventory investment. The lead time demand, first, follows a normal distribution and then, relaxes the distribution function assumption by only assuming the mean and variance of lead time demand are known and applies the minimax distribution free procedure to solve the problem. Furthermore, a numerical example is also given to illustrate the models and solution procedures.
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  Cite this Reference:
A. Gholami-Qadikolaei, M.A. Sobhanallahi and A. Mirzazadeh, 2013. Lead Time Reduction in Budget and Storage Space Restricted Lot Size Reorder Point Inventory Models with Controllable Negative Exponential Backorder Rate.  Research Journal of Applied Sciences, Engineering and Technology, 5(05): 1557-1567.
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ISSN (Online):  2040-7467
ISSN (Print):   2040-7459
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