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Optimal inventory policies for an economic order quantity model with decreasing cost functions. (English) Zbl 1112.90302
Summary: Three total cost minimization EOQ based inventory problems are modeled and analyzed using geometric programming (GP) techniques. Through GP, optimal solutions for these models are found and sensitivity analysis is performed to investigate the effects of percentage changes in the primal objective function coefficients. The effects on the changes in the optimal order quantity and total cost when different parameters of the problems are changed is also investigated. In addition, a comparative analysis between the total cost minimization models and the basic EOQ model is conducted. By investigating the error in the optimal order quantity and total cost of these models, several interesting economic implications and managerial insights can be observed.
MSC:
90B05Inventory, storage, reservoirs
90B50Management decision making, including multiple objectives