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Author(s): |
B. C. OUYANG, Department of Business Administration, Vanung University, Chungli, Taiwan, China, 32061
Y. F. Kao, Department of Business Administration, Vanung University, Chungli, Taiwan, China, 32061 |
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Abstract: |
Over a finite planning horizon, this study presents an inventory model with a non-linearly (quadratic) decreasing trend in demand. A recursive algorithm is developed for obtaining the optimal replenishment schedule under a fixed number of lots and a one-dimension search method is applied for finding the optimal number of replenishment cycles. In this study, theoretical demonstrations are also provided to certify that the replenishment policy is an optimal solution. In addition, numerical examples and cost comparisons to other approaches are carried out. So far, the eclectic approach of Yang et al.[7] is one of the best heuristic algorithms known today for determining the optimal replenishment policy when demand is non-linearly decreasing. From our numerical results, the performance of our algorithm is always better than Yang et al.
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