A production-inventory model for perishable items with demand dependent production rate, shortages and variable holding cost

Ruma Roy Chowdhury and Santanu Kumar Ghosh

International Journal of Procurement Management, 2022, vol. 15, issue 3, 424-446

Abstract: This model investigates the optimal time at which a production cycle should be stopped and then resumed in a production-inventory system, in order to keep shortages under control. This study considers a perishable item that decays at a constant rate. Year 2020 has seen a sudden surge in the demand of masks, PPEs, etc. to combat COVID-19. Such demand, which follows an exponential distribution, has been considered. The production rate is taken to be a linear function of demand, so as to cope up with an exponential market demand. The holding cost is taken to be a linear function of time. Shortages are allowed to occur and are completely backlogged. This model handles variable production, variable demand and variable holding cost simultaneously. The model is illustrated by a numerical example. Sensitivity analysis is carried out and has been detailed with the help of graphs. A case study has also been done.

Keywords: demand dependent production rate; exponential demand; time dependent holding cost; backlogged shortages; constant deterioration. (search for similar items in EconPapers)
Date: 2022
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