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An order level inventory model with three-Component demand rate (TCDR) for newly launched deteriorating item (2010)
| Venue: | International Journal of Operations Research |
| Citations: | 2 - 2 self |
BibTeX
@ARTICLE{Shukla10anorder,
author = {Diwakar Shukla and Uttam Kumar Khedlekar},
title = {An order level inventory model with three-Component demand rate (TCDR) for newly launched deteriorating item},
journal = {International Journal of Operations Research},
year = {2010},
pages = {61--70}
}
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Abstract
Abstract � Assume a company launches a new item as a minor upgradation in the well established product. For example, shaving cream now mixed with fragrance and pink color. It is new and unknown for users as well as in the market but inventory is maintained. Marketing is continued by variety of plans and let deterioration of item occurs only after a duration. This paper introduces a concept of using Three Component Demand Rate (TCDR) and presents an optimum order level inventory model for newly launched deteriorating item by describing two different constant rates of demand, along with time dependent demand. Optimal cost under model is derived along with optimum time and consumed quantity. Results are illustrated by numerical examples and effectiveness of model parameters is discussed through sensitivity analysis with different graphical presentations. The optimal cost sensitiveness is also incorporated in the paper over varying model parameters. Effect of two marketing strategies and market survey durations are examined. Conditions for marketing plan design are discussed and it is found that marketing plans, if designed carefully, highly affect the optimal parameters of a new product inventory system. It generates the form of approximate linear pattern in optimally derived quantities, time, cost and others.
Keyphrases
three-component demand rate order level inventory model model parameter optimal cost sensitiveness market survey duration sensitivity analysis new item marketing strategy optimal cost abstract assume approximate linear pattern three component demand rate optimum time time dependent demand optimum order level inventory model marketing plan design new product inventory system different constant rate minor upgradation optimal parameter numerical example different graphical presentation
