Ds. Dave et al., AN ADVERTISING-INCLUSIVE PRODUCTION LOT-SIZE MODEL UNDER CONTINUOUS DISCOUNT PRICING, Computers & industrial engineering, 30(1), 1996, pp. 147-159
This article deals with the interaction of a deterministic production
lot size inventory model with uniform replenishment rate and different
ial pricing conditions. We present a method for arriving at a producti
on lot size formula, which takes into account the effect of varying ma
rketing conditions on demand and the possibility of defective items in
the production process. Additionally, based upon the previous studies
, different model formulations are introduced to deal with the issue o
f defective items. The profile maximization problem for this model is
derived for two quantity discount cases. hyperbolic-decreasing and lin
ear-decreasing. A numerical example along with sensitivity analysis is
provided to illustrate the results derived. Furthermore, an easy-to-u
se computer algorithm is developed to determine the optimal values of
production lot-size and profit.