Deterministic inventory model for deteriorating items with price dependent demand rate and inflation

Virali Vora¹ , U.B. Gothi²

Section:Research Paper, Product Type: Conference-Paper
Vol.7 , Issue.6 , pp.20-28, Dec-2020

Online published on Dec 31, 2020

Copyright © Virali Vora, U.B. Gothi . 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.
 

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Abstract :
In this study, a deterministic inventory control model has been developed for physical perishable items that deteriorate with selling price dependent linear demand rate. Here, shortages are allowed to occur and are partially backlogged with inflation that incurs lost sale cost which is considered keeping in mind the criteria of modern era. A two parameter Weibull distribution and Pareto Type-I distribution are considered for the time to deterioration. The aim of the paper is to understand retailer’s replenishment decisions under practical circumstances such as having a holding cost as a linear function of time in an economic order quantity model. The model is solved analytically with an objective to find an optimal solution that minimizes the overall cost and maximizes the total profit. Numerical solution is derived by means of an application and a comprehensive sensitivity analysis of the optimal solution is performed to study the effects of the variation in various significant parameters.

Key-Words / Index Term :
Selling price dependent demand rate, Weibull distribution, Pareto Type-I Distribution, Deterioration

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