EOQ MODELS WITH TRANSACTION COST AND TRANSPORTATION COST

• Main Authors: Po-Yu Chen, 陳柏宇
• Other Authors: Horng-Jinh Chang
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/12652751534852338084

博士 === 淡江大學 === 管理科學研究所博士班 === 96 === This thesis constructs two distinct models from the classical EOQ model where the transaction costs and transportation costs are considered respectively. The first extension of EOQ model mainly improves the traditional inventory model in which the demand rate of a product is presumed as a constant. As usual, if the sale leads to the demand of product, the selling rate of inventory will be definitely constant. In practice, however, the expenditure of the consumer on the transaction will be significantly decreased due to the increasing investment in the transaction process for the wholesaler. Thus, the two key factors, “transaction costs and selling price,” will become the important variables that would be incorporated into the inventory decision-making process. Based on this, as constructing a realistic EOQ model, it is necessary to discuss in advance how to utilize a bivariate distribution function with the consumer willing-to-pay price and transaction costs to construct a special demand function, . The one of main contributions in the thesis is to establish such a special demand function by means of a concrete mathematical expression so that the characteristics and the managerial implications of this demand function can be revealed through the sensitivity analysis. Furthermore, this proposed mathematical model applies the characteristics of the special demand function to construct an EOQ model with controllable selling rate. In such a model, the wholesaler can control the selling rate and further determine the initial inventory level for each business cycle by means of manipulating the selling price and the unit transaction costs so that the profit of unit time is maximized. In the traditional EOQ model, the transportation costs during the production and marketing courses are usually regarded as a part of manufacturing or ordering costs. In practice, to give an example of Taiwan, based on the consideration of global arrangement strategy and the geographical proximity between Taiwan and mainland China, many firms have dispersed their manufacturing plants in China and to establish their processing, packing or marketing centers in Taiwan. Thus, facing the transshipment problem, the decision makers must simultaneously consider how many quantities of goods should be ordered and how many container cars with limited capacity and the ceiling on continuous working hours should be rented, so that the total transportation cost per unit time is minimized. The second extension of EOQ model is therefore constructed to analyze and discuss the various characteristics of optimal solutions. That is also another contribution of this thesis.