EOQ MODEL FOR TIME-DEPENDENT DETERIORATION RATE WITH A TEMPORARY PRICE DISCOUNT

Bhavin J. Shah (), Nita H. Shah () and Y. K. Shah
Additional contact information
Bhavin J. Shah: Department of Mathematics and Statistics, B.K. Majumdar Institute of Business Administration — H.L.B.B.A., Navrangpura, Ahmedabad 380009, Gujarat, India
Nita H. Shah: Department of Mathematics, Gujarat University, Ahmedabad 380009, Gujarat, India
Y. K. Shah: Department of Statistics, Gujarat University, Ahmedabad 380009, Gujarat, India

Asia-Pacific Journal of Operational Research (APJOR), 2005, vol. 22, issue 04, 479-485

Abstract: Deterioration is defined as decay, damage, spoilage, evaporation, obsolescence, pilferage, and loss of utility or loss of marginal value of a commodity that reduces usefulness from original ones. Blood, fish, fruits and vegetables, alcohol, gasoline, radioactive chemicals, medicines, etc., lose their utility with respect to time. In this case, a discount price policy is implemented by the suppliers of these products to promote sales. In this study, a mathematical model is developed for an inventory system that considers a temporary price discount when commodities in an inventory system are subject to deterioration with respect to time. Our goal in this article is to maximize the difference between two costs (gain) — taking advantage of price discount by ordering a large quantity, which in turn increases inventory holding cost as well deterioration cost and by not ordering a large quantity at a discounted price. An attempt is made to find bounds on the beneficial discount rate. The model is supported with a numerical example.

Keywords: Time-dependent deterioration; temporary price discount; deterministic demand (search for similar items in EconPapers)
Date: 2005
References: View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0217595905000649
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:apjorx:v:22:y:2005:i:04:n:s0217595905000649

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0217595905000649

Access Statistics for this article

Asia-Pacific Journal of Operational Research (APJOR) is currently edited by Gongyun Zhao

More articles in Asia-Pacific Journal of Operational Research (APJOR) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().