EOQ Model with Backorder for Items with Imperfect Quality Using Cross-Selling Effects

Abstract

This paper aims to obtain Economic Order Quantity (EOQ) model for the items of imperfect quality with backorder using cross-selling effect, where all the items are considered without their interdependency with each other. However, there exist a strong relation between different items, sale of an item depends on the sale of others. Depending on the strength of relationship between items, there may be a loss in their sales, that is, cross-selling effect. Apriori algorithm is used to generate frequent item-sets among the item-sets in an inventory data base. In case of imperfect quality items, cross-selling effects are visible clearly. Moreover, with this effect, frequent item-sets are taken individually and EOQ is computed for them along with shortage level. With the help of a numerical example, we compared results obtained with the existing models.