A Deterministic Inventory/Production Model with General Inventory Cost Rate Function and Concave Production Costs

18 Pages Posted: 28 Oct 2004

See all articles by Z.P. Bayindir

Z.P. Bayindir

Erasmus University Rotterdam (EUR) - Department of Econometrics

S. Ilker Birbil

J. B. G. Frenk

Erasmus University, Rotterdam (EUR) - Department of Econometrics ; Erasmus University, Rotterdam (EUR) - Erasmus Research Institute of Management (ERIM)

Date Written: July 2004

Abstract

We present a thorough analysis of the economic order quantity model with shortages under a general inventory cost rate function and concave production costs. By using some standard results from convex analysis, we show that the model exhibits a composite concave-convex structure. Consequently, an effective solution procedure, particularly useful for an approximation scheme, is proposed. A computational study is appended to illustrate the performance of the proposed solution procedure.

Keywords: inventory, general inventory cost function, concave production cost, concave-convex programming

JEL Classification: M, M11, R4, C6

Suggested Citation

Bayindir, Z.P. and Birbil, S. Ilker and Frenk, J.B.G. (Hans), A Deterministic Inventory/Production Model with General Inventory Cost Rate Function and Concave Production Costs (July 2004). Available at SSRN: https://ssrn.com/abstract=611821 or http://dx.doi.org/10.2139/ssrn.611821

Z.P. Bayindir (Contact Author)

Erasmus University Rotterdam (EUR) - Department of Econometrics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

J.B.G. (Hans) Frenk

Erasmus University, Rotterdam (EUR) - Department of Econometrics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 0 10 408 1257 (Phone)
+31 0 10 408 9162 (Fax)

Erasmus University, Rotterdam (EUR) - Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

No contact information is available for S. Ilker Birbil

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