Title: Production inventory model with deteriorating items with constant, linear and quadratic holding cost - a comparative study
Authors: C.K. Sivashankari
Addresses: S.A. Engineering College, Chennai-600 077, India
Abstract: In the classical inventory model, the holding cost was assumed to be constant. However, in reality holding cost may not always be constant. The holding cost may be time dependent. In this paper, a production inventory model with deteriorating items with constant, linear and quadratic holding cost is considered and also a comparative study is carried out between constant holding cost and time dependent (linear and quadratic) holding costs. Three models are developed. In three models, the optimum time and total cost are derived when the holding cost is: 1) constant; 2) linear; 3) quadratic. A mathematical model is developed for each model and the optimal production lot size which minimises the total cost is derived. The optimal solution is derived and an illustrative example is provided. The validation of result in this model was coded in Microsoft Visual Basic 6.0.
Keywords: production inventory modelling; inventory management; deteriorating items; linear holding cost; quadratic holding cost; constant holding cost; mathematical modelling; lot size optimisation; lot sizing.
International Journal of Operational Research, 2016 Vol.27 No.4, pp.589 - 609
Received: 16 Apr 2014
Accepted: 28 Jun 2014
Published online: 06 Nov 2016 *