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Published in:
2023 | OriginalPaper | Chapter
Considering a Deteriorating EOQ Model Under Stochastic Demand and Shortage Allowed
Authors : Chiang-Sheng Lee, Chien-Hung Cho, Cheng-Thai Tsai, Hsine-Jen Tsai
Published in: Intelligent and Transformative Production in Pandemic Times
Publisher: Springer International Publishing
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Abstract
The inventory model for deteriorating items with a stochastic demand rate is studied in our paper. Inventory models dealing with the deterioration of items have attracted considerable interests in recent decades since the deteriorating phenomenon is a crucial factor affecting the profits of a company. However, most of current inventory models considering deterioration assumes a certain or a constant demand function which is unreasonable in the prevailing market that conforms to our daily reality. Therefore, stochastic demand must be considered. Besides, shortage is allowed in the study. We provide approximating solutions for optimal ordering quantities for our model, and show that our optimal solutions from the assumed models give conditions and results very close to the optimal solutions obtained by computation. Further, these results illustrate the impact of various parameters on the optimal policy and the profit.