Optimal replenishment policy with variable deterioration for fixed-lifetime products

Abstract

Although numerous researchers have developed different inventory models for deteriorating items, very few of them have taken the maximum lifetime of a deteriorating item into consideration. This paper illustrates a mathematical model to obtain an optimal replenishment policy for deteriorating items with maximum lifetime, ramp-type demand, and shortages. Both holding cost and deterioration function are linear functions of time, which are treated as constants in most of the deteriorating inventory models. A simple solution procedure is provided to obtain the optimal solutions. Numerical examples along with graphical representations are provided to illustrate the model. Sensitivity analysis of the optimal solution with respect to key parameters of the model has been carried out and the implications are discussed. (C) 2016 Sharif University of Technology. All rights reserved.