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An Inventory Model with Time-Dependent Demand and Limited Storage Facility under Inflation

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  • Neeraj Kumar
  • S. R. Singh
  • Rachna Kumari

Abstract

The main objective of this paper is to develop a two-warehouse inventory model with partial backordering and Weibull distribution deterioration. We consider inflation and apply the discounted cash flow in problem analysis. The discounted cash flow (DCF) and optimization framework are presented to derive the optimal replenishment policy that minimizes the total present value cost per unit time. When only rented or own warehouse model is considered, the present value of the total relevant cost is higher than the case when two-warehouse is considered. The results have been validated with the help of a numerical example. Sensitivity analysis with respect to various parameters is also performed. From the sensitivity analysis, we show that the total cost of the system is influenced by the deterioration rate, the inflation rate, and the backordering ratio.

Suggested Citation

  • Neeraj Kumar & S. R. Singh & Rachna Kumari, 2012. "An Inventory Model with Time-Dependent Demand and Limited Storage Facility under Inflation," Advances in Operations Research, Hindawi, vol. 2012, pages 1-17, November.
    • Handle: RePEc:hin:jnlaor:321471
    DOI: 10.1155/2012/321471
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    Cited by:

    1. Janssen, Larissa & Claus, Thorsten & Sauer, Jürgen, 2016. "Literature review of deteriorating inventory models by key topics from 2012 to 2015," International Journal of Production Economics, Elsevier, vol. 182(C), pages 86-112.

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