Inventory Model with Fixed Shelf Life under Generalized Non-Increasing Demand

Han-Wen Tuan, Kuo-Chen Hung and Gino K. Yang
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Han-Wen Tuan: Department of Multimedia Game Development and Application, Hungkuang University, Taichung City 43302, Taiwan
Kuo-Chen Hung: Department of Multimedia Game Development and Application, Hungkuang University, Taichung City 43302, Taiwan
Gino K. Yang: Department of Multimedia Game Development and Application, Hungkuang University, Taichung City 43302, Taiwan

Mathematics, 2021, vol. 9, issue 21, 1-15

Abstract: In this paper, we develop an economic order quantity (EOQ) model for fixed shelf-life items and a non-increasing demand. The objective of this model is to maximize the total profit. We find the criterion to decide (i) the interior maximum solution or (ii) the boundary maximum solution. Eight numerical examples are given to illustrate all possible scenarios of this generalized model. Our results identify a scenario for which the maximum profit is always negative. This is highly relevant for firms in the public sector operating at a financial loss.

Keywords: inventory; non-increasing demand; shelf-life; expiry date (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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