A Two-Warehouse Inventory Model with Quantity Discount in Rents for Deteriorating Items

• Main Authors: Chung-chieh Hsu, 許仲傑
• Other Authors: Chun-chen Lee
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/jsdne8

碩士 === 東吳大學 === 會計學系 === 96 === Inventory management is a hot topic no matter in business, government, army, or non-profit organization. "The Economic Order Quantity Model" has been an important model in the inventory management. Hartely(1976) is the first scholar who maximize the EOQ model to unlimited. In this theory, he assumed that the company does not need to compromise to insufficient material when the best purchasing quantity measured by EOQ Model is higher than the capacity of owned-warehouse. Logistic centers and storage companies tend to compromise in price in order to increase the utility of their warehouse and facility. For this reason, the quantity discount which is related to the ordering cost, holding cost, and other costs, is the key issue for the success of a company in this industry. Besides, the issues such as deterioration during storage, the risk during moving, etc, also bring us the importance of inventory management. How companies make the decision about the optimal quantity and quality of renting storage under the consideration of quantity discount and product deterioration is an area that is less covered. For this reason, I am going to the take the issues in this essay in the hope of helping the decision making process of companies and applying the theories into the practical cases. I will also make assumptions to the EOQ model by taking quantity discount and deterioration into consideration and then apply it into the practical case. Last, I will conduct sensitivity analysis and then make a summary about what variables are correlated to the inventory management decision making process.