EOQ model for time dependent demand with deterioration, inflation, shortages and trade credits

R.P. Tripathi

International Journal of Information and Decision Sciences, 2024, vol. 16, issue 1, 73-89

Abstract: The inflation acts an important role for each area of life in the world. Inflation varies rapidly for high tech commodities with passing over time. This study develops an EOQ model with time sensitive demand rate for deteriorating products and shortages with inflation over a predetermined planning horizon. Mathematical formulations are prepared under two cases: 1) time for positive inventory (T₁) is greater than credit period M; 2) T₁ is less than or equal to credit period M, to gain optimal number of replenishment and cycle time. An algorithm is presented to find the most favourable cycle time so that total annual relevant profit is maximised. We then demonstrate the total profit is concave with respect to number of replenishments. Numerical examples are offered to display the model. Sensitivity investigation for variation of a number of key parameters is also discussed. Mathematica 7.0 software is used to calculate numerical results and optimality conditions.

Keywords: cash flow; inflation; non-increasing demand; credit period; shortages. (search for similar items in EconPapers)
Date: 2024
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