Title: A production inventory model for deteriorating items with growth of demand and shortages

Authors: C.K. Sivashankari; S. Panayappan

Addresses: S.A. Engineering College, Chennai-600 077, India ' CSIR Emeritus Scientist, Government Arts College, Coimbatore-641 015, India

Abstract: In all inventory models, a general assumption is that products generated have indefinitely long lives. In general, almost all items deteriorate over time. In EPQ model, the demand rate is constant and it does not change over the period. But in real life, the demand rate is fluctuating over the period. At the end of the particular period, the demand rate will get changed. So, the rate of growth of demand is introduced in this paper. The rate of growth in the production period is D(1 + i)ⁿ and in the consumption period is D(1 + i)ⁿ. This research considers inventory systems for production inventory models where the objective is to find the optimal cycle time, which minimise the total cost and optimal amount of shortage if it is allowed. The relevant model is built, solved and closed formulas are obtained. Necessary and sufficient conditions are derived. An illustrative example is provided and numerically verified. The validation of result in this model was coded in Microsoft Visual Basic 6.0.

Keywords: economic order quantity; EOQ; item deterioration; cycle time; optimisation; shortages; demand growth; production inventory modelling; deteriorating items.

DOI: 10.1504/IJOR.2015.072726

International Journal of Operational Research, 2015 Vol.24 No.4, pp.441 - 460

Received: 23 Aug 2013
Accepted: 08 Dec 2013
Published online: 28 Oct 2015 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article