Ordering policies for items with seasonal demand

Abstract

This paper deals with finding economic order quantity, number of orders to be placed and/or the time to place each order for four different special types of problems that may be encountered in practice. The first problem (Problem 1a) assumes a fixed planning horizon and a perishable product such as Christmas trees or fashion merchandise whose value deteriorates as the item gets aged. Under constant demand assumption, solution for this type of problem is worked out by capturing the deterioration in value by increasing holding cost. The second problem (Problem 2) has the same assumption as the first, except that the demand is assumed to increase as we move forward in time. The third problem (Problem 2a) is a restricted version of the second, which allows a specific number of integer orders during the planning horizon. The fourth problem (Problem 3) allows the ordering cost to increase as time progresses. All formulae derived can be easily applied to find numerical answers. The answers may have to be adjusted to reflect container size, minimum order quantity and any other restriction not modeled, or to take into account any violation of the model assumptions.

Citation

Gupta, Y., Sundararaghavan, P.S. and Ahmed, M.U. (2003), "Ordering policies for items with seasonal demand", International Journal of Physical Distribution & Logistics Management, Vol. 33 No. 6, pp. 500-518. https://doi.org/10.1108/09600030310492760