Inventory Model for Imperfect Quality Items with Different Deterioration Rates under Inflation and
Permissible Delay in Payments

Abstract:- Many times it happens that units produced or ordered are not of 100% good quality. A deterministic inventory model for imperfect quality items is developed when deterioration rate is different during a cycle with permissible delay in payment under inflation. Here it is assumed that holding cost is time dependent. Demand is considered as linear function of time. Numerical example is taken to support the model.

Key Words: Inventory model, Varying Deterioration, Linear demand, Defective items, Inflation, Permissible Delay

I. INTRODUCTION

Deterioration effect cannot be ignored for many items in real life. Inventory model with constant rate of deterioration was developed by Ghare and Schrader [5]. The model was extended by Covert and Philip [4] by considering variable rate of deterioration. Other related work for deteriorating items are found in (Nahmias [10], Raffat [13], Ruxian, et al [14]). Many times it happens that units produced or ordered are not of 100% good quality. A model of imperfect production quantity was developed by establishing relationship between demand dependent unit production cost and imperfect production process by Cheng [3]. An inventory model in which items received are of defective quality and after 100% screening process, imperfect items are withdrawn from the inventory and sold at a discounted price was considered by Salmeh and Jaber [15]. Patel and Patel [12] developed an EOQ model for deteriorating items with imperfect quality items. Patel and Sheikh [11] developed an inventory model with different deterioration rates and time varying holding cost. Goyal [6] was the first to develop an economic order quantity model under the condition of permissible delay in payments. The model was extended by Aggarwal and Jaggi [1] to consider the deteriorating items. Aggarwal and Jaggi’s [1] model was further extended by Jamal et al.[8] to consider shortages. Teng et al. [16] developed an optimal pricing and lot sizing model by considering price sensitive demand under permissible delay in payments. Jaggi et al. [7] developed an inventory model for deteriorating items with imperfect quality under permissible delay in payment.
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