A MATHEMATICAL EOQ INVENTORY MODEL FOR DETERIORATING ITEMS WITH EXPONENTIALLY DECREASING DEMAND AND SHORTAGES WITH PARTIAL BACKLOGGING
Keywords:
Inventory, deteriorating items, exponentially decreasing demand, EOQ model, backlogged shortagesAbstract
This study proposes an Economic Order Quantity(EOQ) inventory system for items with a constant deterioration rate over an infinite planning horizon. Demand varies in time and it is assumed that it follows an exponential decrease pattern. Shortages are allowed and backlogged. The ordering cost, holding cost, the deteriorating cost, the backlogging cost and opportunity cost due to lost sales have been considered in the inventory model. An approach is proposed to minimize the total cost. This cost depends on two decision variables: the time at which the inventory level falls to zero and the length of ordering cycle. Finally, one numerical example is given to illustrate the theoretical results and made the sensitivity analysis on the optimal solutions.
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