#TITLE_ALTERNATIVE#
In a perfectly competitive market, lost sale happens when there is a shortage; demand is ususally lost permanently. Shortages also result in a lost of goodwill for the distributor or retailer. The finite-horizon economic inventory model is more appropriate than the infinite-horizon planning model fo...
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| Main Author: | |
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| Format: | Theses |
| Language: | Indonesia |
| Online Access: | https://digilib.itb.ac.id/gdl/view/22312 |
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| Institution: | Institut Teknologi Bandung |
| Language: | Indonesia |
| Summary: | In a perfectly competitive market, lost sale happens when there is a shortage; demand is ususally lost permanently. Shortages also result in a lost of goodwill for the distributor or retailer. The finite-horizon economic inventory model is more appropriate than the infinite-horizon planning model for product with short life cycles. <br />
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This study extends a previous Economic Order Quantity (EOQ) model to include lost sales inventory and finite planning horizon. Exact algorithms are developed for this model. The objectives are to determine an optimal number of orders and reorder point to minimize total relevant cost that consists of order cost, holding cost, and shortages cost. Numerical examples and sensitivity analyses are performed to validate the models and to demonstrate the practical use of the study. The analysis shows that the minimum total relevant cost of the finite planning horizon method using the proposed algorithm in this study is higher than the global optimal solution using integer non-linear programming. Managerial insights are provided for decision makers to implement the optimal inventory policies with service levels that have been determined at the beginning of the inventory system plan. |
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