American Journal of Operations Research

Volume 9, Issue 5 (September 2019)

ISSN Print: 2160-8830   ISSN Online: 2160-8849

Google-based Impact Factor: 1.04  Citations  h5-index & Ranking

An Ordering Policy for Deteriorating Items with Time-Dependent Quadratic Demand and Salvage Value under Permissible Delay in Payment

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DOI: 10.4236/ajor.2019.95013    458 Downloads   813 Views  

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.

Share and Cite:

Singh, T. , Muduly, M. , Mallick, C. , Gupta, R. and Pattanayak, H. (2019) An Ordering Policy for Deteriorating Items with Time-Dependent Quadratic Demand and Salvage Value under Permissible Delay in Payment. American Journal of Operations Research, 9, 201-218. doi: 10.4236/ajor.2019.95013.

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