Title: Economic order quantity model for Pareto distributed decaying products with quadratic demand, shortage and salvage value

Authors: Uttam Kumar Sharma; Varun Mohan; S. Sindhuja; Pervaiz Iqbal

Addresses: Department of Mathematics, MKR Government Degree College, Nandgram Ghaziabad, 201003, India ' Department of Mathematics, Sharda University, Greater Noida, 201306, UP, India ' Department of Mathematics and Actuarial Sciences, B.S. Abdur Rahman Crescent Institute of Science and Technology, Vandalur, Chennai, 600 048, India ' Department of Mathematics and Actuarial Sciences, B.S. Abdur Rahman Crescent Institute of Science and Technology, Vandalur, Chennai, 600 048, India

Abstract: At the present time, estimating demand and deterioration for some products becomes difficult because these key components of any economic order quantity (EOQ) model become dependent on price, freshness level and many other factors. On the other hand, rising competition does not allow managers to dispose of deteriorated items. In this paper, we incorporated salvage value parameter in the EOQ model with quadratic time dependent demand and Pareto distributed deterioration. Also, the stock out condition is allowed and completely backlogged. With these axioms' expressions for total inventory cost, inventory cycle time and lot size value are derived and optimised. Proposed model findings are described with the help of numerical example. Sensitivity analysis supports the relevance of salvage value parameter, i.e., rise in salvage value reduces the total inventory cost.

Keywords: deterioration; variable demand; salvage value; variable holding cost.

DOI: 10.1504/IJMOR.2024.138464

International Journal of Mathematics in Operational Research, 2024 Vol.27 No.4, pp.479 - 495

Received: 13 Dec 2022
Accepted: 18 Feb 2023
Published online: 04 May 2024 *

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