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Economic ordering policy for single item inventory model over finite time horizon

Author

Listed:
  • R. Udayakumar

    (Bharathiar University)

  • K. V. Geetha

    (PSNA College of Engineering and Technology)

Abstract

This paper deals with an economic order quantity (EOQ) model for non-instantaneous deteriorating items in which the demand is a deterministic function of selling price and advertisement cost under the effect of inflation and time value of money over a finite planning horizon. In addition, a permissible delay in payment within the cycle time is offered by the supplier as an alternative to price discount. Finite replenishment rate is considered. Two different scenarios are considered here, that is, shortages are not permitted in scenario-I and shortages are permitted with partial backlogging in scenario-II. The objective of this work is to minimize the total inventory cost and to find the optimal length of replenishment and the optimal order quantity. Theoretical approaches described for the proposed scenarios are studied with the help of numerical examples. Sensitivity analysis for the major parameters of the inventory system is made and the managerial implications are given. Comparison of various results obtained for the two scenarios are studied and analyzed in detail.

Suggested Citation

  • R. Udayakumar & K. V. Geetha, 2017. "Economic ordering policy for single item inventory model over finite time horizon," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 8(2), pages 734-757, November.
    • Handle: RePEc:spr:ijsaem:v:8:y:2017:i:2:d:10.1007_s13198-016-0516-1
    DOI: 10.1007/s13198-016-0516-1
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    References listed on IDEAS

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    1. Yang, Hui-Ling & Teng, Jinn-Tsair & Chern, Maw-Sheng, 2010. "An inventory model under inflation for deteriorating items with stock-dependent consumption rate and partial backlogging shortages," International Journal of Production Economics, Elsevier, vol. 123(1), pages 8-19, January.
    2. Chern, Maw-Sheng & Yang, Hui-Ling & Teng, Jinn-Tsair & Papachristos, Sotiris, 2008. "Partial backlogging inventory lot-size models for deteriorating items with fluctuating demand under inflation," European Journal of Operational Research, Elsevier, vol. 191(1), pages 127-141, November.
    3. Shah, Nita H & Soni, Hardik N & Patel, Kamlesh A, 2013. "Optimizing inventory and marketing policy for non-instantaneous deteriorating items with generalized type deterioration and holding cost rates," Omega, Elsevier, vol. 41(2), pages 421-430.
    4. Wu, Kun-Shan & Ouyang, Liang-Yuh & Yang, Chih-Te, 2006. "An optimal replenishment policy for non-instantaneous deteriorating items with stock-dependent demand and partial backlogging," International Journal of Production Economics, Elsevier, vol. 101(2), pages 369-384, June.
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    7. Soni, Hardik N, 2013. "Optimal replenishment policies for non-instantaneous deteriorating items with price and stock sensitive demand under permissible delay in payment," International Journal of Production Economics, Elsevier, vol. 146(1), pages 259-268.
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