TITLE:
An Ordering Policy for Deteriorating Items with Time-Dependent Quadratic Demand and Salvage Value under Permissible Delay in Payment
AUTHORS:
Trailokyanath Singh, Madan Mohan Muduly, Chittaranjan Mallick, Rahul Kumar Gupta, Hadibandhu Pattanayak
KEYWORDS:
Constant Deterioration Rate, Deteriorating Items, Economic Order Quantity, Permissible Delay in Payment, Salvage Value, Time-Dependent Quadratic Demand Rate
JOURNAL NAME:
American Journal of Operations Research,
Vol.9 No.5,
August
15,
2019
ABSTRACT: The article deals with an economic order quantity (EOQ) inventory model for deteriorating items in which the supplier provides the purchaser a permissible delay in payment. This is so when deterioration of units in the inventory is subject to constant deterioration rate, demand rate is quadratic function of time and salvage value is associated with the deteriorated units. Shortages in the system are not allowed to occur. A mathematical formulation is developed when the supplier offers a permissible delay period to the customers under two circumstances: 1) when delay period is less than the cycle of time; and 2) when delay period is greater than the cycle of time. The method is suitable for the items like state-of-the-art aircrafts, super computers, laptops, android mobiles, seasonal items and machines and their spare parts. A solution procedure algorithm is given for finding the optimal order quantity which minimizes the total cost of an inventory system. The article includes numerical examples to support the effectiveness of the developed model. Finally, sensitivity analysis on some parameters on optimal solution is provided.