TY - JOUR
T1 - An order-revenue inventory model with returns and sudden obsolescence
AU - Barron, Yonit
N1 - Publisher Copyright:
© 2017 Elsevier B.V.
PY - 2018/1
Y1 - 2018/1
N2 - 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.
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.
KW - Economic-order-quantity
KW - Inventory model
KW - MAP process
KW - Obsolescence
KW - Phase-type distribution
KW - Returns
UR - http://www.scopus.com/inward/record.url?scp=85037523178&partnerID=8YFLogxK
U2 - 10.1016/j.orl.2017.11.005
DO - 10.1016/j.orl.2017.11.005
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AN - SCOPUS:85037523178
SN - 0167-6377
VL - 46
SP - 88
EP - 92
JO - Operations Research Letters
JF - Operations Research Letters
IS - 1
ER -