A Partially Backlogged Inventory Model for Time-Deteriorating Items Using Penalty Cost and Time-Dependent Holding Cost

Biman Kanti Nath () and Nabendu Sen ()
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Biman Kanti Nath: Assam University
Nabendu Sen: Assam University

SN Operations Research Forum, 2022, vol. 3, issue 4, 1-14

Abstract: Abstract This paper presents an inventory model for items that do not deteriorate for some period of time but after that period they continuously deteriorate and lose their utility, thereby incorporating loss to the system. This degree of loss is expressed by penalty cost function. The prime focus of this work is to develop the economic order quantity model for time-deteriorating items that takes into account penalty cost incurred due to utility deterioration. The demand of the item is considered to be time-dependent. To represent a dynamic market behaviour, holding cost is taken as linear function of time. The objective of this model is to find optimal ordering quantity and optimal shortage occurrence time with a view to minimize the total average cost of the system. Necessary theoretical results are formulated in order to minimizing total cost function and based on which a solution algorithm is designed. Furthermore, a numerical example is taken to illustrate the model and sensitivity analysis is performed with respect to some important inventory parameters.

Keywords: Penalty cost; Deterioration; Partial backlogging; Demand; Holding cost (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s43069-022-00173-5

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