We present a thorough analysis of the economic order quantity model with shortages under a general inventory cost rate function and concave production costs. By using some standard results from convex analysis, we show that the model exhibits a composite concave-convex structure. Consequently, an effective solution procedure, particularly useful for an approximation scheme, is proposed. A computational study is appended to illustrate the performance of the proposed solution procedure.

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ERIM Report Series Research in Management , Econometric Institute Research Papers
Erasmus Research Institute of Management

Birbil, I., Frenk, H., & Bayindir, P. (2004). A Deterministic Inventory/Production Model with General Inventory Cost Rate Function and Concave Production Costs (No. ERS-2004-064-LIS). Econometric Institute Research Papers. Retrieved from http://hdl.handle.net/1765/1536