Optimal inventory policy under power demand pattern and partial backlogging

•We study an inventory model with a power demand pattern that allows shortages.•It is assumed that only a fraction of shortages are backlogged.•We suppose that both shortage unitary costs are time-dependent.•We develop a sequential optimization procedure for determining the optimal policy.•The model...

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Bibliographic Details
Published in:Applied Mathematical Modelling 2017-06, Vol.46, p.618-630
Main Authors: San-José, Luis A., Sicilia, Joaquín, González-De-la-Rosa, Manuel, Febles-Acosta, Jaime
Format: Article
Language:English
Subjects:
Demand
Energy shortages
Inventory management
Inventory models
Mathematical models
Numerical analysis
Partial backlogging
Power demand pattern
Shortage costs
Shortages
Studies
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Summary:•We study an inventory model with a power demand pattern that allows shortages.•It is assumed that only a fraction of shortages are backlogged.•We suppose that both shortage unitary costs are time-dependent.•We develop a sequential optimization procedure for determining the optimal policy.•The model analyzed extends to several inventory models proposed in the literature. In this paper, we study an inventory model with a power demand pattern that allows shortages. It is assumed that only a fraction of demand is backlogged during the shortage period and the remainder is considered lost sales. The aim of the paper is to determine the lot size and the length of the inventory cycle that maximize the total inventory profit per unit time. A general approach to obtain the optimal solution of the inventory problem and the maximum associated profit is developed. Some inventory models proposed in the literature are particular cases of the model analyzed here. Numerical examples are included to complement the theoretical results.
ISSN:0307-904X
1088-8691
0307-904X
DOI:10.1016/j.apm.2017.01.082