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In this paper, we provide some useful properties for finding theoptimal replenishment schedule with stock-dependent demandunder exponential partial backlogging. First, no matter that buildingup inventory has a positive or negative effect on the profit, inTheorem 1(a), Theorem 1(c), Theorem 2(c) and Theorem 2(d), wepoint out that inventory should be displayed to the maximumallowable W units in the beginning and established a unique optimalsolution to the problem respectively. Second, when buildingup inventory has a negative effect on the profit, in Theorem 2(a)and Theorem 3(a), we also establish a unique optimal solution tothe problem respectively, and reveal that inventory displayed inthe beginning is less than the shelf space. Third, since decision variablesin our problem cannot be solved by simple algebraic means,they have to be solved numerically by using Newton–RaphsonMethod (or any bisection method). Based on our arguments, in orderto find the optimal t2 and t2 such that Z t2 ¼ 0 and G t2 ¼ 0respectively, a proper choice of the initial value t2 is very importantdue to possible local maxima. Without the right choice of initial value,for example, taking t2 > ~t2, Newton–Raphson Method fails to produce a solution satisfying the sufficient condition for the maximalityproblem of TP(t1, t2)and it will converge to a saddle point.The proposed model can be extended in several ways. For instance,we could extend the deterministic demand function to stochasticdemand patterns. The demand could also be generalized asa function of the price and stock level. Furthermore, we could generalizethe model to allow for permissible delay in payments.
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