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Modelling and Simulation in Engineering
Volume 2012 (2012), Article ID 103258, 10 pages
Research Article

Simulation Modeling for Analysis of a (Q, r) Inventory System under Supply Disruption and Customer Differentiation with Partial Backordering

Department of Industrial and Mechanical Engineenng, Qazvin Branch, Islamic Azad University, Barajin, Daneshgah St., Nokhbegan Blvd., P.O. Box 34185141, Qazvin, Iran

Received 11 December 2011; Accepted 19 February 2012

Academic Editor: Azah Mohamed

Copyright © 2012 Parham Azimi et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


We have modeled a new (Q, r) inventory system which involves a single product, a supplier, and a retailer with customer differentiation under continuous review inventory policy. The supplier provides the retailer with all requirements, and the retailer sells products to the customers. The supplying process is randomly subject to disruptions. Partial backordering is applied when a stock out occurs, and customer can select either to leave the system without purchasing or to backorder products. The customers are categorized into two main classes regarding to their backordering probabilities. The main contribution of this paper is including the customer differentiation in the inventory model. We used simulation technique to verify the impact of supply disruptions and customer differentiation and carried out sensitivity analysis. To test the performance of the model, we have compared our model to one from the latest related research. As the results show, the average of total annual cost of the (Q, r) inventory system is lower than that of the previously developed models such as (r, T) inventory systems.