An integrated inventory system for profit maximization considering partial demand satisfaction

Abstract

To evaluate and substantiate the importance of investments in enterprise resource planning within an inventory system facing shortages, with the objective of maximizing profit and enhancing operational efficiency and decision-making accuracy. An inventory framework that considers shortages is developed with investments in advanced systems and is examined using two methods, namely with and without enterprise resource planning investments. This study formulates an integrated inventory system and comparative analysis has been made to study the effectiveness of the systems under two categories namely (i) an inventory system under shortages and without the investment of enterprise resource planning and (ii) an inventory system considering shortages and with the integration of enterprise resource planning investment by using secondary data from Umakanta Mishra’s research. A computational example is presented to show the efficiency of the systems under shortages and the results show that the total profit with and without the integration of Enterprise Resource Planning is $290072.873 and $289358.716, respectively. The findings suggest that incorporating investments in Enterprise Resource Planning into an inventory system that accounts for shortages significantly enhances economic performance by optimizing profit and supply chain processes. The efficiency of Enterprise Resource Planning in an inventory system under the consideration of shortages to optimize profit-enhancing operational efficiency is not yet explored in existing literature.