Inventory Model with Different Deterioration Rates for Imperfect Quality Items and Inflation considering Price and Time Dependent Demand under Permissible Delay in Payments
Abstract: One of the assumptions for an economic order quantity model is that all items received in an order are of perfect quality is not always fulfilled. Some of the items are of defective quality in the lot received. Another assumption is that as soon as items are received, payments are made. In today’s competitive the supplier allows certain fixed period known as permissible delay for payment to the retailer for settling the amount of items received. Keeping this reality, a deterministic inventory model with imperfect quality is developed when deterioration rate is different during a cycle. Here it is assumed that demand is a function of time and price. Numerical example is taken to support the model. Sensitivity analysis is also carried out for parameters.
Key Words: Inventory model, Varying Deterioration, Time dependent demand, Price dependent demand, Defective items, Inflation, Permissible Delay
INTRODUCTION ost of the items lose their characteristics overtime and this characteristic is defined as deterioration. Ghare and Schrader [8] considered inventory model with constant rate of deterioration. Covert and Philip [7] extended the model by considering variable rate of deterioration. Mandal and Phaujdar [14] presented an inventory model for stock dependent consumption rate. Haiping and Wang [11] studied an economic policy model for deteriorating items with time proportional demand. Patel and Parekh [17] developed an inventory model with stock dependent demand under shortages and variable selling price. Other research work related to deteriorating items can be found in, for instance (Raafat [20], Goyal and Giri [10], Ruxian et al. [22]). In reality, it happens that units ordered are not of 100% good quality. Rosenblat and Lee [21] were the first to focus on defective items. Salman and Jaber [24] developed an inventory model in which items received are of defective quality and after 100% screening, imperfect items are withdrawn from the inventory and sold at a discounted price.
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