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- Title
Profit maximization inventory model with uncertain demand and costs: A geometric programming approach.
- Authors
Mondal, Tapas; Ojha, Akshay Kumar; Pani, Sabyasachi
- Abstract
In this paper, we formulate a new profit maximization inventory model in which demand is a power function of selling price, marketing expenditure, and service expenditure, and unit cost is a power function of order quantity. In reality, the exponents of selling price, marketing expenditure, and service expenditure in a demand function and the exponent of order quantity in a unit cost function may not be exact. So, we consider the model in an uncertain-based framework with the assumption that the exponents of selling price, marketing expenditure, and service expenditure in a demand function and the exponent of order quantity in a unit cost function are uncertain. Based on uncertainty theory, we develop a method to find the equivalent crisp model. In addition, we use the geometric programming method to solve the crisp model. Furthermore, we give a suitable numerical example to show how the proposed methodology can be used to solve the model for different uncertainty distributions at different uncertainty levels. In the numerical example, we use five different uncertainty distributions and figure out the selling price, marketing cost, service cost, order quantity, and profit with respect to the uncertainty level for each uncertainty distribution. Finally, we perform a sensitivity analysis for a better understanding of the proposed model.
- Subjects
GEOMETRIC programming; PROFIT maximization; GEOMETRIC approach; MARKETING costs; COST functions; STOCHASTIC programming
- Publication
Journal of Industrial & Management Optimization, 2024, Vol 20, Issue 5, p1
- ISSN
1547-5816
- Publication type
Article
- DOI
10.3934/jimo.2023142