joint pricing and ordering policy for two echelon imperfect production inventory model with two cycles abstract this study deals with an imperfect epq economic production quantity price dependent inventory model over two types of cycles in the first cycle the retailer sells only good product with actual price and in the second he sells the products with a discount price in the production run time the non conforming items are produced at a random rate and they are reworked after the regular production run time and the reworked items are almost perfect as good as original quality items the retailer starts the second cycle when a certain percent of good items are left to him after the completion of regular production the retailer continues simultaneously two cycles up to which both types of the products are available to him now our objective is to find out optimal ordering lot size and optimal price for which the profit of the integrated model is maximum also we check the best strategy of retailer for the time of starting second cycle a numerical example is provided to illustrate the behavior and application of the model

a deterministic inventory model for deteriorating items with stock dependent demand rate abstract a deterministic inventory model is developed by assuming that the demand rate is stock dependent and the items deteriorate at a constant rate the expression for the average net profit over one production run is derived and its optimization with respect to the decision variables q initial stock and t duration of a production cycle is carried out this leads to two highly nonlinear equations which are solved by using a subroutine neqnf in imsl math library in cyber 180 480a computer system the optimal solution so derived is compared with that for the no deterioration 0 case sensitivity of the optimal solution to changes in parameter values is examined several aspects of the functional form for the demand rate are considered in a separate section finally the salient features of the problem and its solution are discussed in brief

optimal production lot with imperfect production process under permissible delay in payments and complete backlogging abstract the traditional economic production quantity epq model assumes that the production products are all perfect it is not always true in the real production system due to imperfect production process or other factors imperfect quality items may be produced furthermore it is well known that the total production inventory costs can be reduced by reworking the imperfect quality items produced with a relatively smaller additional reworking and holding costs in addition the permissible delay in payments offered by the supplier is widely adopted in the practical business market in this study we explore the effects of the reworking imperfect quality items and trade credit on the epq model with imperfect production processes and complete backlogging a mathematical model which includes the reworking and shortage costs interest earned and interest charged is presented besides an arithmetic geometric mean inequality approach is employed and an algorithm is developed to find the optimal production policy furthermore some numerical examples and sensitivity analysis are provided to demonstrate the proposed model

an eoq model with stock dependent demand shortage inflation and time discounting abstract this paper develops a finite time horizon deterministic economic order quantity eoq inventory model with shortages where the demand rate at any instant depends on the on hand inventory stock level at that instant the effects of inflation and the time value of money are taken into account considering two separate inflation rates namely the internal company inflation rate and the external general economy inflation rate the results are discussed with a numerical example and particular case of the model is discussed in brief a sensitivity analysis of the optimal solution with respect to the parameters of the system is carried out

commitment and fairness in a dynamic regulatory relationship this paper considers a multiperiod model of a regulated firm that has stationary private information which may be revealed through performance if it cannot make commitments to future policies the regulator has an incentive to exploit any information the firm reveals and laffont and tirole show that there is no regulatory policy that is separating over any closed interval a fairness arrangement is proposed in which the firm agrees not to quit if in future periods the regulator allows it to earn a nonnegative profit given the type it revealed in earlier periods the properties of such arrangements are studied and an example is presented in which both the firm and the regulator prefer a fairness arrangement to a policy feasible without commitment

the undesirability of randomized income taxation under decreasing risk aversion abstract for the standard specification of the utilitarian optimal income tax problem with hidden characteristics the paper shows that randomized tax schemes are undesirable if preferences exhibit a property of weakly decreasing risk aversion according to the multidimensional risk aversion concept of hellwig hellwig m f 2004 risk aversion in the small and the large with multidimensional outcomes max planck institute for research on collective goods bonn preprint 2004 6 http www mpp rdg mpg de pdf dat 2005 23online pdf this property of decreasing risk aversion also implies that the optimal income tax schedule is unique and depends continuously on the data of the problem

the core of an economy with transaction costs this paper defines a new concept of the core for an economy with transaction costs and uses this concept to prove a limit theorem for sequences of replica economies in this way it provides a rationale for a definition of equilibrium in which agents face a sequence of budget constraints since economies with incomplete markets are special cases of economies with transaction costs the limit theorem also provides a rationale for radner s equilibrium of plans prices and price expectations

a contribution to the theory of optimal utilitarian income taxation abstract the paper provides a new formulation of the mirrlees seade theorem on the positivity of the optimal marginal income tax under weaker assumptions and in a more general model the formulation of the theorem is independent of whether the model involves finitely many types or a continuous type distribution the formal argument makes the underlying logic transparent relating the mathematics to the economics and showing precisely how each assumption enters the analysis

managing real time demand fluctuation under a supplier retailer coordinated system abstract we have considered a supplier retailer system that operates under an agreed coordinated policy with an imperfect production process and a possibility of having demand fluctuation in this paper a dynamic planning process is proposed to deal with short term demand fluctuations to do this a mathematical model was first developed for a single fluctuation either for increasing or decreasing demand rate the model generates a revised plan after the occurrence of the fluctuation event we also propose a new and efficient heuristic to solve the developed model secondly multiple fluctuations have been considered for which a new occurrence may or may not affect the revised plan of earlier occurrences and we extend the heuristic so that is capable of dealing with multiple demand fluctuations on a real time basis we have generated a good number of random test problems and also solved the model using a genetic algorithm in order to compare the solutions with our heuristic the comparison confirmed the consistent performance of our developed heuristic and also its lower computational time numerical examples and sensitivity analysis have been presented to explain the usefulness of the developed model

inventory models with inventory level dependent demand a comprehensive review and unifying theory marketing researchers and practitioners have long recognized the demand of many retail items is proportional to the amount of inventory displayed recently two distinct types of inventory control models reflecting this relationship have appeared in the literature models in which the demand rate of an item is a function of the initial inventory level and those in which it is dependent on the instantaneous inventory level we present a comprehensive overview of this literature and demonstrate the equivalence of the two types of models through the use of a simple periodic review model an alternative approach to sensitivity analysis for inventory models with inventory level dependent demand is also presented

on the optimality of optimal income taxation abstract the mirrleesian model of income taxation restricts attention to simple allocation mechanism with no strategic interdependence i e the optimal labor supply of any one individual does not depend on the labor supply of others it has been argued by piketty 2009 12 that this restriction is substantial because more sophisticated mechanisms can reach first best allocations that are out of reach with simple mechanisms in this paper we assess the validity of piketty s critique in an independent private values model as a main result we show that the optimal sophisticated mechanism is a simple mechanism or equivalently a mirrleesian income tax system

a production inventory model in an imperfect production process abstract the paper develops a model to determine the optimal product reliability and production rate that achieves the biggest total integrated profit for an imperfect manufacturing process the basic assumption of the classical economic manufacturing quantity emq model is that all manufacturing items are of perfect quality the assumption is not true in practice most of the production system produces perfect and imperfect quality items in some cases the imperfect quality non conforming items are reworked at a cost to restore its quality to the original one rework cost may be reduced by improvements in product reliability i e decreasing in product reliability parameter lower value of product reliability parameter results in increase development cost of production and also smaller quantity of nonconforming products the unit production cost is a function of product reliability parameter and production rate as a result higher development cost increases unit production cost the problem of optimal planning work and rework processes belongs to the broad field of production inventory model which deals with all kinds of reuse processes in supply chains these processes aim to recover defective product items in such a way that they meet the quality level of good item the benefits from imperfect quality items are regaining the material and value added on defective items and improving the environment protection in this point of view a model is introduced here to guide a firm industry in addressing variable product reliability factor variable unit production cost and dynamic production rate for time varying demand the paper provides an optimal control formulation of the problem and develops necessary and sufficient conditions for optimality of the dynamic variables in this purpose the euler lagrange method is used to obtain optimal solutions for product reliability parameter and dynamic production rate finally numerical examples are given to illustrate the proposed model

an inventory model for deteriorating items with stock dependent demand rate abstract this paper discusses an inventory model with an inventory level dependent demand rate followed by a constant demand rate for items deteriorating at a constant rate where the terminal condition of zero inventory at the end of the scheduling period has been relaxed sensitivity of the decision variables to changes in the parameter values is examined and the effects of these changes on the optimal policy are discussed in brief

the existence of equilibrium without free disposal in economies with transaction costs and incomplete markets this paper presents a general model of an economy with transaction costs and proves the existence of a competitive equilibrium using t c bergstrom s procedure to discard the free disposal assumption since economies with incomplete markets are shown to be special cases of economies with transaction costs this result is used to discuss the conditions for the existence of an equilibrium in economies with incomplete markets copyright 1987 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

optimal stopping and restarting production times for an eoq model with deteriorating items and time dependent partial backlogging abstract yan and cheng j operational res soc 49 1998 1288 1295 presented a general production inventory model with production rate product demand rate and deterioration rate all considered as functions of the time their model allows for shortages and partial backlogging of the unsatisfied demand at a constant rate in this paper we extend the results of yan and cheng to cover the case where the backlogging rate is a time dependent function and we propose an algorithm for the solution of this problem we also propose some conditions which we believe to be necessary for the validity for some of yan s and cheng s statements the paper closes with numerical examples which cover each one of the cases considered in the paper

valuation of product mix flexibility using real options abstract flexibility in manufacturing operations is becoming increasingly more important to industrial firms due to e g increasing market demand volatility internationalisation of markets and competition and shorter product life cycles defining measuring and evaluating manufacturing flexibility have not been straightforward neither in theory nor in practice the use of real options has shown to be an accessible approach for the valuation of certain types of flexibility when using real options for capital budgeting purposes it is possible to take flexibility options into account in the valuation process in this paper we use real options to evaluate one specific type of manufacturing flexibility i e product mix flexibility we provide both theoretical and practical perspectives based on a real case the main interest of the company under study is to evaluate product mix flexibility with respect to capacity set ups level of automation and multi functionality of resources the case involves multiple products and demand uncertainty wherefore product demands are used as the underlying asset in the real options models thus the contribution of this paper concerns the combination of real case multiple products capacity constraints and set up costs the results of the analysis show that i the value of flexibility decreases when demand volatility increases ii flexible resources add substantial value as compared to dedicated resources and iii the flexibility value of marginal capacity decreases with increasing levels of capacity

monopoly with incomplete information recent theoretical research on principal agent relationships has emphasized incentive problems that arise when the parties involved are constrained by either asymmetric information or their inability to monitor each other s actions here we concentrate on the former constraint and consider the case of a single principal the monopolist the main contribution is to show that under a separability assumption strong conclusions can be drawn about the nature of optimal incentive schemes although the primary focus is on optimal quantity discounts in a monopolized market the results also shed light on related topics such as optimal income taxation and commodity bundling

implementation of first best allocations via generalized tax schedules abstract the classical problem of optimal taxation introduced by j mirrlees rev econ stud 38 1971 175 208 is addressed and it is argued that by using generalized tax schedules i e schedules which depend not only on individual income but also on the whole profile of incomes announced by the society a planner can implement any pareto optimum which stands in great contrast with the set of second best pareto optima attainable via classical tax schedules the mechanism relies crucially on the fixed probability distribution of characteristics and on a finite number of agents journal of economic literature classification numbers d78 d82 h21

voting over selfishly optimal nonlinear income tax schedules abstract majority voting over selfishly optimal nonlinear income tax schedules proposed by a continuum of individuals who have quasilinear in consumption preferences is considered roell 2012 has shown that individual preferences over these schedules are single peaked in this article a complete characterization of selfishly optimal schedules is provided each selfishly optimal schedule has a bunching region in a neighborhood of the proposer s skill type coincides with the maxi max schedule below this region and coincides with the maxi min schedule above it using techniques introduced by vincent and mason 1967 the bunching region is identified by solving an unconstrained optimization problem information about the optimal schedules is used to provide a relatively simple proof of single peakedness the condorcet winning tax schedule features marginal tax rates that are negative resp positive on the maxi max resp maxi min part of the schedule except at the endpoints of the skill distribution where they are zero

production inventory models for a damageable item with variable demands and inventory costs in an imperfect production process in this paper economic production quantity epq models for breakable or deteriorating item are developed with variable demands being dependent on time or on hand stock here rate of production and holding cost are time dependent unit production cost is a function of both production reliability indicator and production rate set up cost is also partially production rate dependent the production process produces some imperfect quantities which are instantly reworked at a cost to bring back those units to the perfect ones the production process ultimately depends on both time and reliability indicator the models are formulated as optimal control problems and the total profit functions with effect of inflation and time value of money are expressed as finite integrals over the finite planning horizon the problems are solved using euler lagrange function based on variational calculus and newton raphson method to determine the optimal production reliability indicator r and then corresponding production rates and total profits in some cases results of the models for deteriorating item are obtained as particular cases from those of breakable item models similarly results of simple epq models without damageability are deduced as particular cases numerical experiments are performed to illustrate the models both numerically and graphically

optimal indirect and capital taxation we consider an environment in which agents skills are private information and follow arbitrary stochastic processes we prove that it is typically pareto optimal for an individual s marginal benefit of investing in capital to exceed his marginal cost of doing so this wedge is consistent with a positive tax on capital income we also prove that it is pareto optimal for the marginal rate of substitution between any two consumption goods to equal the marginal rate of transformation this lack of a wedge is consistent with uniform taxation of consumption goods within a period

an imperfect production process in a volume flexible inventory model abstract this paper hypothesizes an imperfect production inventory system where the items produced are a mixture of perfect and imperfect quality some of the imperfect quality items can be sold at a reduced selling price the unit production cost is taken to be a function of the finite production rate which is treated as a decision variable the mathematical expression for the expected profit function is derived and it is maximized subject to different constraints of the system using interior penalty function method for constrained optimization the algorithm of which is given the solution procedure is illustrated with the help of numerical examples the sensitivity of each variable to changes in the values of the parameters of the system is examined lastly various issues conforming the system are discussed

on the robustness of laissez faire abstract this paper considers a model economy in which agents are privately informed about their type their endowments of various goods and their preferences over these goods while preference orderings over observable choices are allowed to be correlated with an agent s private type we assume that the planner government is both uncertain about the nature of this joint distribution and unable to choose among multiple equilibria of any given social mechanism we model the planner government as having a maxmin objective in the face of this uncertainty our main theorem is as follows once we allow for this kind of uncertainty and assume no wealth effects in preferences the uniquely optimal social contract is laissez faire in which agents trade in unfettered markets with no government intervention of any kind

inventory models with the demand rate dependent on stock and shortage levels this paper investigates an inventory system in which the demand rate during stockout periods differs from that during the in stock period by a given amount the previous analysis conducted in this area formulated the model as a cost minimization model this type of formulation will intentionally try to decrease demand by increasing the stockout period in order to decrease costs this paper appropriately considers the model as a profit maximization model and develops a closed form solution the model is then further generalized to incorporate the effect of stock level dependent demand rates and considers initial stock dependent demand as well as instantaneous stock dependent demand rates

effects of inflation and time value of money on an inventory model with linear time dependent demand rate and shortages abstract in the present paper an attempt has been made to investigate the effects of inflation and time value of money on an inventory model with linear time dependent demand rate shortages are allowed in this model the model developed in this article is a finite horizon t si policy inventory model to the best of the authors knowledge such type of inventory model has not been considered earlier a numerical example has also been given to illustrate the developed model

optimal nonlinear income taxation with a finite population abstract in the standard optimal income taxation problem tax payments depend only on each consumer s own actions piketty j econ theory 61 1993 23 41 shows that if one individual s tax schedule depends on others actions and the government knows the exact ability distribution it can implement any undistorted allocation as the unique revelation game outcome if some individuals misreveal their types piketty s mechanism may assign infeasible allocations we require that tax schedules must balance the government budget for every possible vector of revelations when individuals reveal their type by simple announcements all undistorted allocations can be still implemented even with off equilibrium feasibility constraints

demand promotion by upgradation under stock dependent demand situation a model the idea of demand promotion by upgrading the existing system of the selling centre has been modelled in this article the consumption rate is assumed to be dependent on the stock level the problem has been reduced to a maximizing problem the algorithmic approach for solving this maximizing problem is also provided objective is to maximize the net profit over a prescribed time an increasing convex upgradation cost is considered exponential upgradation cost has been considered for the numerical examples

optimal and heuristic inventory replenishment models for deteriorating items with exponential time varying demand abstract in this paper we present optimal and heuristic procedures for the inventory replenishment problem in which items are deteriorating at a constant rate the demand rates are changing exponentially with time over a known and finite planning horizon we have developed an iterative numerical procedure to find the optimal replenishment schedule the first two heuristics are based on the economic order interval approximation the third heuristic restricts all the replenishment cycles over the planning horizon to be equal over the planning horizon the last three heuristics are extended versions of the silver meal heuristic the least cost approach and the least unit cost heuristic which were used in the inventory literature for the case of discrete time varying demand without deterioration we further assess the cost and computation time effectiveness of the six heuristics the results of a sample of 1440 problems show that the extended least cost approach is the most cost effective

on the efficiency of equilibrium with transaction costs this paper defines a concept of efficiency for economies with transactions costs called nash efficiency which characterizes in the sense of the fundamental theorems of welfare economics equilibrium allocations in these economies in particular it is shown that these allocations are nash efficient and under certain conditions any nash efficient allocation may be decentralized as an equilibrium with a system of lump sum transfers copyright 1989 by the london school of economics and political science

efficiency welfare and political competition we study political competition in an environment in which voters have private information about their preferences our framework covers models of income taxation public goods provision or publicly provided private goods politicians are vote share maximizers they can propose any policy that is resource feasible and incentive compatible they can also offer special favors to subsets of the electorate we prove two main results first the unique symmetric equilibrium is such that policies are surplus maximizing and hence first best pareto efficient second there is a surplus maximizing policy that wins a majority against any welfare maximizing policy thus in our model policies that trade off equity and efficiency considerations are politically infeasible jel codes c72 d72 d82 h21 h41 h42

heuristics for impulse replenishment with continuous periodic demand abstract we present a model where the demand appears at continuous time and all demand must be met the demand function is periodic with active and passive periods linear increasing and decreasing demand rates respectively the inventory is replenished at discrete time this paper is concerned with the problem of how to determine the replenishment schedule that minimizes the total production and holding cost over a long time horizon we show that there is no forecast horizon in our model even if the demand rate is constant there exists approximate forecast horizon for such case we obtain an explicit formula for the minimal sets of rational initial decisions for the periodic demand rate case we formulate some necessary conditions for optimal schedules two heuristics are also proposed the first is an improved version of the silver meal heuristic and the second is based on turnpike policies

nonlinear price discrimination with a finite number of consumers and constrained recontracting abstract in the monopoly nonlinear pricing problem with unobservable consumer types we study mechanisms in which the firm makes the set of consumer options conditional on the aggregate reports of consumer types it receives previous mechanisms that exploit knowledge of the true type distribution often have multiple equilibria or use noncredible contracts off the equilibrium path when the monopolist can replace contracts after initial reports subject to the constraint that truthful consumers are not made worse off the outcome is essentially the same as when the monopolist has full information this holds whether or not the monopolist can make offers to consumers who reject all original contract offers when the monopolist must guarantee nonnegative surplus to all truthful consumers in all contingencies the equilibrium outcome has undistorted contracts but lower profits for the monopolist

mechanism design for free but no free disposal services the economics of personalization under privacy concerns online personalization services belong to a class of economic goods with a no free disposal nfd property where consumers do not always prefer more services to less because of the privacy concerns these concerns arise from the revelation of information necessary for the provision of personalization services we examine vendor strategies in a market where consumers have heterogeneous concerns about privacy in successive generalizations we allow the vendor to offer a fixed level of personalization variable levels of personalization and monetary transfers coupons to the consumers that depend on the level of personalization chosen we show that a vendor offering a fixed level of personalization does not offer a coupon unless his marginal value of information mvi is sufficiently high and even when personalization is costless the vendor does not cover the market under a fixed services offering the vendor serves the same market with or without couponing next we demonstrate that in the absence of couponing the vendor s optimal variable personalization services contract maximizes surplus for all heterogeneous consumers which is in contrast to standard results from monopolistic screening when the vendor can offer coupons that vary according to personalization levels the optimal contract is not fully revealing unless his mvi is high and he will not offer coupons when this mvi is low however a vendor with a moderate mvi between certain thresholds offers a bunched contract wherein consumers with low privacy concerns receive a variable services coupon contract those with moderate privacy concerns receive a fixed services coupon contract and those with high privacy concerns do not participate in the market the coupon value is decreasing in privacy sensitivity of consumers

optimal production inventory policy for an integrated multi stage supply chain with time varying demand abstract an integrated multi stage supply chain with time varying demand over a finite planning horizon is considered in this paper the objective is to devise the optimal production inventory policy to minimize the total operational cost the model is formulated as a mixed integer nonlinear programming problem the problem is represented as a weighted directed acyclic graph the global minimum total operational cost is computed in polynomial time by the developed algorithm two numerical examples of a seasonal product and a product over its life cycle are studied to illustrate the results a sensitivity analysis of the system parameters is conducted to assist the supply chain decision makers

a production inventory model for a deteriorating item with trended demand and shortages abstract a production inventory model is developed for a deteriorating item over a finite planning horizon with a linear time varying demand finite production rate and shortages the resulting nonlinear constrained minimization problem is numerically solved by using the box complex algorithm the optimal number of production cycles that minimizes the average system cost is determined sensitivity analysis of the optimal solution is carried out

effects of inflation and the time value of money on order quantity and allowable shortage abstract this paper investigates the effects of inflation and time value of money on the optimal ordering quantities and the maximum allowable shortage in a finite replenishment inventory system the present value of total cost incurred in this inventory system is developed first then an optimal order quantity and maximum allowable shortage are obtained by using a search procedure the effect of inflation and time value of money was investigated under given sets of values of inflation and discount rates this study shows that the optimal order quantity and maximum allowable shortage vary with the change in difference between inflation and time discount computational results indicate that this effect on the system becomes more significant with the increase of the difference between inflation rate and time discount rate

self selection and pareto efficient taxation abstract this paper analyses the set of pareto efficient tax structures the formulation of the problem as one of self selection not only shows more clearly the similarity between this problem and a number of other problems such as the optimal pricing of a monopolist which have recently been the subject of extensive research but also allows the derivation of a number of new results we establish i under fairly weak conditions randomization of tax structures is desirable ii if different individuals are not perfect substitutes for one another in production then the general equilibrium effects until now largely ignored in the literature of changes in the tax structure may be dominant in determining the optimal tax structure in particular if the relative wage of high ability and low ability individuals depends on the relative supplies of labor the optimal tax structure entails a negative marginal tax rate on the high ability individuals and a positive marginal tax rate on the low ability individuals the marnitude of which depends on the elasticity of substitution iii if individuals differ in their preferences pareto efficient taxation may entail negative marginal tax rates for high incomes while iv if wage income is stochastic the marginal tax rate at the upper end may be 100 our analysis thus makes clear that the main qualitative properties of the optimal tax structure to which earlier studies called attention are not robust to these attempts to make the theory more realistic