Joint replenishment policy with backordering and special sale

Abstract

In this paper, an inventory control model with a joint replenishment policy and a temporary discount is developed. We assume that shortage is allowed and buyer uses an economic order quantity inventory control model. Different cases based on ordering policies for the first joint replenishment if the special order is not taken, and coincidence of a special period length with a positive or negative inventory level of the last regular period length, are investigated. Furthermore, several theorems are proved through which closed-form solutions are obtained. At the end, two numerical examples illustrate the different situations that the buyer may face and sensitivity analyses for both examples are reported.