Title: Effect of time value of money in production inventory models for deteriorative items with price - exponential demand - in third order equation

Authors: V. Choudri; C. Senthilkumar

Addresses: RMD Engineering College, Kavaraipetti – 601206, India ' Jeppiaar Institute of Technology, Sriperumbudur – 631604, India

Abstract: A production inventory models for deteriorative items with price-dependent demand joint with exponential time dependent demand is considered in this research. The demand models found in the literature include constant, linear quadratic, exponential, price dependent and stock dependent among others. To witness, no study exists that uses price-dependent demand joint with exponential time dependent demand for deteriorating items. Two models are developed. The first model uses price-dependent demand joint with exponential time dependent demand. The second model uses effect of time value of money in model 1. Mathematical models are delineated for each model and relevant examples are provided to elucidate the proposed procedure. The objective herein is to obtain optimum order quantities and order intervals with respect to overall maximise profit. Sensitivity analysis is provided for each of the two models. The necessary data was generated using Visual Basic 6.0.

Keywords: inventory; deterioration; production; TVM; PDD; optimality; total profit; sensitivity analysis.

DOI: 10.1504/IJPM.2023.130738

International Journal of Procurement Management, 2023 Vol.17 No.2, pp.229 - 254

Received: 10 Aug 2021
Accepted: 12 Nov 2021
Published online: 04 May 2023 *

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