Study On Inventory Models With Variable Holding Cost And Backlogging

Inventory management can balance enterprise's logistics, maintain steady production rate, that is very important to business management. But it can also hold plentiful capital, increase inventory cost. Consequently, reasonable inventory control can decrease inventory cost effectively, then increase the profit and improve enterprise's competitive power.The present paper introduce the classical inventory models, comment on a lot of inventory models with backlogging and varying holding cost and obtain some important searching results.A production inventory model is put forward with time variable holding and shortage cost based on an EOQ model while demanded with different backlogging rate during the shortage period under backlogging rate relevant to production. A numerical example and sensitivity analysis are presented to illustrate the model. The influence of (h,s) on the inventory cost is greater than the those of the other parameters. The factors (h,s) should be considered in actual work. The paper then use the actual data of Chongqing Wangshi Industry Ltd. to illustrate the model. The result indicates that the improvement inventory control policy can decrease enterprise's total cost obviously.We study an EOQ model which allows for shortage based on Wilson inventory model, the present model assumes that the shortages are completely backlogged and the unit holding cost is assumed to be step functions of holding time,. Procedures are developed for determining the optimal order quantity and the optimal cycle time. A numerical example and analysis are given, the unit holding cost and ordering cost have great influence on the total cost, the two factors should be considered seriously.Provide an EOQ model which allows for shortage. The backlogging is characterized using an approach in which the collective behavior of customers hings on the ratio between waiting time and shortage period and on the service level. A numerical example and sensitivity analysis are presented to illustrate the model. Sensitivity analysis shows that large backlogging rate needs high service level. And total cost is sensitivity to the unit lost cost, the factor should be considered seriously.