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An EOQ model for deteriorating items with time-dependent exponential demand rate and penalty cost

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  • Sushil Kumar

Abstract

The present paper deals with an EOQ model for deteriorating items with time-dependent exponential demand rate and partial backlogging. Shortages are allowed and completely backlogged in this model. The backlogging rate of unsatisfied demand is assumed as a function of waiting time. The concept of penalty cost is introduced in the proposed model because there are many perishable products that do not deteriorate for some period of time and after that period they continuously deteriorate and lose their values. This loss can be incurred as penalty cost to the wholesalers/retailers. In any business organization, the penalty cost has an important role for special types of seasonal products and short life products. Therefore, the total cost of the product can be reduced by maximizing the demand rate and minimizing the penalty cost during a given period of time. The purpose of our study is to optimise the total variable inventory cost. A numerical example is also given to show the applicability of the developed model.

Suggested Citation

  • Sushil Kumar, 2019. "An EOQ model for deteriorating items with time-dependent exponential demand rate and penalty cost," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 29(3), pages 37-49.
    • Handle: RePEc:wut:journl:v:3:y:2019:p:37-49:id:1396
    DOI: 10.37190/ord190303
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    References listed on IDEAS

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    1. G.S. Mahapatra & Sudip Adak & T.K. Mandal & Shilpi Pal, 2017. "Inventory model for deteriorating items with time and reliability dependent demand and partial backorder," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 29(3), pages 344-359.
    2. Fujiwara, Okitsugu & Perera, U. L. J. S. R., 1993. "EOQ models for continuously deteriorating products using linear and exponential penalty costs," European Journal of Operational Research, Elsevier, vol. 70(1), pages 104-114, October.
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    1. Biman Kanti Nath & Nabendu Sen, 2022. "A Partially Backlogged Inventory Model for Time-Deteriorating Items Using Penalty Cost and Time-Dependent Holding Cost," SN Operations Research Forum, Springer, vol. 3(4), pages 1-14, December.

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