Title: A finite time horizon EOQ model with ramp-type demand rate under inflation and time-discounting

Authors: Tapan Roy, Kripasindhu Chaudhuri

Addresses: Department of Mathematics, Vidyasagar College for Women, 39 Sankar Ghosh Lane, Kolkata 700006, India. ' Department of Mathematics, Jadavpur University, Kolkata 700032, India

Abstract: An economic order quantity (EOQ) inventory problem is discussed over a finite time for deteriorating items with shortages, where the demand rate is of the ramp-type. It is assumed that a constant fraction of the on-hand inventory deteriorates per unit time. The time-value of money and the effects of inflation are taken into account, considering two separate inflation rates: the internal (within the company) and the external (in general economy) inflation rates. The optimality condition for the cost function is analysed and established. The numerical solutions of the model are obtained by considering shortage and no shortage in inventory. Also, we compare this model with infinite time-horizon model. The sensitivity of the parameters involved in the model is also examined. Finally, some concluding remarks are made to highlight the importance of the present work.

Keywords: inventory modelling; ramp-type demand; deterioration; shortage; inflation rates; finite time horizon; EOQ models; economic order quantity; time discounting; cost function.

DOI: 10.1504/IJOR.2011.040330

International Journal of Operational Research, 2011 Vol.11 No.1, pp.100 - 118

Published online: 14 Feb 2015 *

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