Single-period Two-product Inventory Model with Reorder and Substitution

作     者：LI Xiao-shen GAO Ke-quan LI Xiao-shen;GAO Ke-quan

作者机构：Department of Applied Mathematics Dalian University of Technology Dalian 116024 China Department of Mathematics Physics Henan University of Science Technology Luoyang 471000China 

出 版 物：《Chinese Quarterly Journal of Mathematics》 (数学季刊（英文版）)

年 卷 期：2006年第21卷第1期

页      面：148-158页

核心收录：

学科分类：12[管理学] 1201[管理学-管理科学与工程(可授管理学、工学学位)] 

主　　题：inventory optimal order quantity substitution reorder 

摘      要：In market, excess demands for many products can be met by reorder even during one period, and retailers usually adopt substitution strategy for more benefit. Under the retailer＇s substitution strategy and permission of reorder, we develop the profits maximization model for the two-substitutable-product inventory problem with stochastic demands and proportional costs and revenues. We show that the objective function is concave and submodular, and therefore the optimal policy exists. We present the optimal conditions for order quantity and provide some properties of the optimal order quantities. Comparing our model with Netessine and Rudi＇s, we prove that reorder and adoption of the substitution strategy can raise the general profits and adjust down the general stock level.