AN INVENTORY MODEL FOR DETERIORATING ITEMS WITH STOCK-DEPENDENT DEMAND UNDER THE CONDITIONS OF INFLATION AND TIME-VALUE OF MONEY |
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| Authors: | LIANG-YUH OUYANG TSU-PANG HSIEH CHUNG-YUAN DYE HUNG-CHI CHANG |
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| Affiliation: | 1. Tamkang University , TAIWAN;2. Shu-Te Institute of Technology , TAIWAN;3. National Taichung Institute of Technology , TAIWAN |
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| Abstract: | In this paper, we incorporate the effects of inflation and time-value of money in inventory decision making when demand, at each time moment rather than being constant, is considered to be dependent upon current stock level. In addition, the shortages are neither completely backlogged nor completely lost assuming the backlogging rate to be linearly dependent on the amount of demand backlogged. We shall be concerned with finding the optimal number of replenishments and service rate to minimize the total relevant costs over a finite planning horizon. Numerical examples are presented to illustrate the proposed models. |
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