Entropic Order Quantity (EnOQ) Model for Decaying Items with Partial Backordering and Lost Sale
Anima Bag, Prakash K. Tripathy, Monalisha Pattnaik · International journal of statistics and systems · 2017
In this paper the pricing and lot sizing entropic model for a decaying item under finite production, exponential decay, partial backordering and lost sale is considered.These cost parameters are not easy to eliminate in practice.A new model is framed by introducing new approach of entropy cost.When the customers seem to be impatient, the backlogging option is used.The objective of this model is to maximize the average profit so as to determine the optimal selling price, cycle time for positive inventory, cycle time for stock-out condition and order quantity respectively.The numerical analysis shows that an appropriate policy can benefit the retailer and the policy is important, especially for a decaying item with consideration of entropy.Finally comparative analysis is also done to draw managerial implications for gaining competitive advantage in business functions.