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Inspection policy for inventory system with deteriorating products

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  • Tai, Allen H.
  • Xie, Yue
  • Ching, Wai-Ki

Abstract

Typical inventory models usually focus on screening out the deteriorating items, not much attention is paid to the situation that a proportion of deteriorated items are sold to consumers together with serviceable items during a replenishment cycle. This paper first presents a model to formulate the process of such kind of mixed sales. A simple closed-form solution is obtained for maximizing the net profit per unit time under the assumption of small deterioration rate. The effect of shortage back-ordering is then considered and closed-form solutions of optimal ordering quantity and replenishment time are obtained under similar assumption. We further study the effect of inspection policies on optimal decisions for a deteriorating inventory system. A dynamic programming approach is proposed for solving the optimal policy. Numerical examples are then provided to demonstrate our conclusions and results.

Suggested Citation

  • Tai, Allen H. & Xie, Yue & Ching, Wai-Ki, 2016. "Inspection policy for inventory system with deteriorating products," International Journal of Production Economics, Elsevier, vol. 173(C), pages 22-29.
    • Handle: RePEc:eee:proeco:v:173:y:2016:i:c:p:22-29
    DOI: 10.1016/j.ijpe.2015.11.018
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    References listed on IDEAS

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    1. Yue Xie & Allen H. Tai & Wai-Ki Ching & Yong-Hong Kuo & Na Song, 2021. "Joint inspection and inventory control for deteriorating items with time-dependent demand and deteriorating rate," Annals of Operations Research, Springer, vol. 300(1), pages 225-265, May.
    2. Lin, Feng & Jia, Tao & Wu, Feng & Yang, Zhen, 2019. "Impacts of two-stage deterioration on an integrated inventory model under trade credit and variable capacity utilization," European Journal of Operational Research, Elsevier, vol. 272(1), pages 219-234.
    3. Santosh Shekhawat & Nazek Alessa & Himanshu Rathore & Kalpna Sharma, 2022. "A Green Approach—Cost Optimization for a Manufacturing Supply Chain with MFIFO Warehouse Dispatching Policy and Inspection Policy," Sustainability, MDPI, vol. 14(21), pages 1-17, November.
    4. Sadia Samar Ali & Haripriya Barman & Rajbir Kaur & Hana Tomaskova & Sankar Kumar Roy, 2021. "Multi-Product Multi Echelon Measurements of Perishable Supply Chain: Fuzzy Non-Linear Programming Approach," Mathematics, MDPI, vol. 9(17), pages 1-27, August.
    5. Tai, Allen H. & Xie, Yue & He, Wanhua & Ching, Wai-Ki, 2019. "Joint inspection and inventory control for deteriorating items with random maximum lifetime," International Journal of Production Economics, Elsevier, vol. 207(C), pages 144-162.
    6. Ata Allah Taleizadeh & Sara Tavassoli & Arijit Bhattacharya, 2020. "Inventory ordering policies for mixed sale of products under inspection policy, multiple prepayment, partial trade credit, payments linked to order quantity and full backordering," Annals of Operations Research, Springer, vol. 287(1), pages 403-437, April.

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