Technical Note: Single-period two-product inventory model with substitution: Solution and properties

Lianqiao Cai; Jian Chen; Houmin Yan

doi:10.1007/s11518-006-0157-z

Journal of Systems Science and Systems Engineering ›› 2004, Vol. 13 ›› Issue (1) : 112 -123. DOI: 10.1007/s11518-006-0157-z

Article

Technical Note: Single-period two-product inventory model with substitution: Solution and properties

Lianqiao Cai ¹^,²^,³
, Jian Chen ¹^,²^,³
, Houmin Yan ¹^,²^,³

Author information +

History +

PDF

Abstract

In this paper, we study a single-period two-product inventory model with stochastic demands and downward substitution. The optimal order quantities are presented and some properties are provided. Comparing with newsboy model, we prove that both the profit and the fill rate can be improved by using the substitution policy.

Keywords

Inventory model / optimal order quantity / substitution / newsboy model

Cite this article

Download citation ▾

Lianqiao Cai, Jian Chen, Houmin Yan. Technical Note: Single-period two-product inventory model with substitution: Solution and properties. Journal of Systems Science and Systems Engineering, 2004, 13(1): 112-123 DOI:10.1007/s11518-006-0157-z

登录浏览全文

4963

注册一个新账户忘记密码

References

Publishing order | Descend order by publishing year | Descend order by cited within

[1]	Balakrishnan A., Geunes J.. Requirements planning with substitutions: exploiting bill-of-materials flexibility in production planning. Manufacturing & Service Operations Management, 2000, 2(2): 166-185.

[2]	Bassok Y., Anupindi R., Akella R.. Single-period multiproduct inventory models with substitution. Operations Research, 1999, 47(4): 632-642.

[3]	Ernst R., Kouvelis P.. The effects of selling packaged goods on inventory decisions. Management Science, 1999, 45(8): 1142-1155.

[4]	Leachman R.. Preliminary design and development of a corporate-level production system for the semiconductor industry, 1987, CA: Operations Research Center, University of California at Berkeley

[5]	McGillivray A., Silver E. A.. Some concepts for inventory control under substitutable demands. INFOR, 1978, 16(1): 47-63.

[6]	Netessine S., Rudi N.. Centralized and competitive inventory models with demand substitution. Operations Research, 2003, 51(2): 329-335.

[7]	Pasternack B., Drezner Z.. Optimal inventory policies for substituable commodities with stochastic demand. Naval Research Logistics, 1991, 38: 221-240.

[8]	Wagner H., Whitin T. W.. Dynamic version of the economic lot size model. Management Science, 1958, 5: 89-96.

[9]	Yao, D.D., and S. Zheng, “Inventory with substitution: single-and multi-period models”, Shanthikumar, J.G., Yao, D.D. and Zijm, W.H.M. (eds.), Stochastic Modeling and Optimization of Manufacturing Systems and Supply Chains, Kluwer, Chapter 8, pp177–202, 2003.