Modeling of inventory problems provides a good insight to retailers and distributors to maintain stock of different items such as seasonal products, perishable goods and daily useable goods etc. The deterioration of all these items exists to a certain extent due to several reasons like mishandling, evaporation, decay, environmental conditions, transportation etc. It is found from the literature that previously many of the researchers have developed inventory model ignoring deterioration and drawn conclusion. In the absence of deterioration parameter, an inventory model cannot be completely realistic. In this paper, we have made an attempt to extend an inventory model with ramp-type demand and price discount on back order where deterioration was not taken into account. In our study, deterioration and constant holding cost are taken into consideration keeping all other parameters same. As a result, the inventory cost function is newly constructed in the presence of deterioration. The objective of this investigation is to obtain optimal cycle length, time of occurrence of shortages and corresponding inventory cost. This extended model is solved for minimum value of average inventory cost analytically. A theorem is framed to characterize the optimal solution. To validate the proposed model, a numerical example is taken and convexity of the cost function is verified. In order to study the effect of changes of different parameters of the inventory system on optimal cycle length, time of occurrence of shortages and average inventory cost, sensitivity analyses have been performed. Also, the numerical result and sensitivity analyses are graphically presented in the respective section of this paper to demonstrate the model. This study reveals that a better solution can be obtained in the presence of our newly introduced assumptions in the existing model.
Saha, Sumit; Sen, Nabendu; and Nath, Biman K.
Inventory Model with Ramp-type Demand and Price Discount on Back Order for Deteriorating Items under Partial Backlogging,
Applications and Applied Mathematics: An International Journal (AAM), Vol. 13,
1, Article 30.
Available at: https://digitalcommons.pvamu.edu/aam/vol13/iss1/30