An inventory model of instantaneous deteriorating items with controllable deterioration rate for time dependent demand and holding cost

Purpose: The purpose of this paper to develop an inventory model for instantaneous deteriorating items with the consideration of the facts that the deterioration rate can be controlled by using the preservation technology (PT) and the holding cost & demand rate both are linear function of time which was treated as constant in most of the deteriorating inventory model. Design/methodology/approach: Developed the mathematical equation of deterministic deteriorating inventory model in which demand rate and holding cost both is linear function of time, deterioration rate is constant, backlogging rate is variable and depend on the length of the next replenishment, shortages are allowed and partially backlogged and obtain an analytical solution which optimizes the total cost of the proposed inventory model. Findings: The model can be applied for optimizing the total inventory cost of deteriorating items inventory for such business enterprises where they use the preservation technology to control the deterioration rate under other assumptions of the model. Originality/value: The inventory system for deteriorating items has been an object of study for a long time, but little is known about the effect of investing in reducing the rate of product deterioration and their significant impact in the business. The proposed model is effective as well as efficient for the business organization that uses the preservation technology to reduce the deterioration rate of the instantaneous deteriorating items of the inventory.Peer Reviewe

Controllable deterioration rate for time-dependent demand and time-varying holding cost

In this paper, we develop an inventory model for non-instantaneous deteriorating items under the consideration of the facts: deterioration rate can be controlled by using the preservation technology (PT) during deteriorating period, and holding cost and demand rate both are linear function of time, which was treated as constant in most of the deteriorating inventory models. So in this paper, we developed a deterministic inventory model for non-instantaneous deteriorating items in which both demand rate and holding cost are a linear function of time, deterioration rate is constant, backlogging rate is variable and depend on the length of the next replenishment, shortages are allowed and partially backlogged. The model is solved analytically by minimizing the total cost of the inventory system. The model can be applied to optimizing the total inventory cost of non-instantaneous deteriorating items inventory for the business enterprises, where the preservation technology is used to control the deterioration rate, and demand & holding cost both are a linear function of time

A study of inflation effects on an EOQ model for Weibull deteriorating/ameliorating items with ramp type of demand and shortages

This paper deals with the effects of inflation and time discounting on an inventory model with general ramp type demand rate, time dependent (Weibull) deterioration rate and partial backlogging of unsatisfied demand. The model is studied under the replenishment policy, starting with shortages under two different types of backlogging rates, and their comparative study is also provided. We then use the computer software, MATLto find the optimal replenishment policies. Duration of positive inventory level is taken as the decision variable to minimize the total cost of the proposed system. Numerical examples are then taken to illustrate the solution procedure. Finally, sensitivity of the optimal solution to changes of the values of different system parameters is also studied

A Two Warehouse Inventory Model with Stock-Dependent Demand and variable deterioration rate

In this paper we discuss a two warehouses inventory model for non-instantaneous deteriorating items. Throughout last so many years, mostly researchers have consideration to the situation where the demand rate is dependent on the level of the on-hand inventory. For inventory systems, such as fashionable commodities, the length of the waiting time for the next replenishment would determine whether the backlogging will be accepted or not. In real life situation, enterprises usually buy more goods than can be stored in their own warehouses (OW) for future production or sales. The surplus quantities are frequently stored in an extra storage space, represented by rented warehouses (RW).The rented warehouse is considered to charge high unit holding cost than the own warehouse. The necessary and sufficient conditions of the existence and uniqueness of the optimal solution are shown. We determine the optimal replenishment policy for non-instantaneous deteriorating items with partial backlogging and stock-dependent demand

EOQ inventory model for perishable products under uncertainty

Perishable products require accurate inventory control models as their effect on operations management can be critical. This assumption is particularly relevant in highly uncertain and dynamic markets, as for the ones generated by the pandemic era. This paper presents an inventory control model for perishable items with a demand rate variable over time, and dependent on the inventory rate. The model also considers the potential for backlogging and lost sales. Imperfect product quality is included, and deterioration is modelled as a time-dependent variable. The framework envisages the possibility to define variables affected by uncertainty in terms of probability distribution functions, which are then jointly managed via a Monte Carlo simulation. This paper is intended to provide an analytical formulation to deal with uncertainty and time-dependent inventory functions to be used for a variety of perishable products. The formulation is designed to support decision-making for the identification of the optimal order quantity. A numerical example exemplifies the outcomes of the paper and provides a cost-based sensitivity analysis to understand the role of main parameters

Retailer’s optimal pricing and ordering policies for non-instantaneous deteriorating items with price-dependent demand and partial backlogging

[[abstract]]An inventory system for non-instantaneous deteriorating items with price-dependent demand is formulated and solved. A model is developed in which shortages are allowed and partially backlogged, where the backlogging rate is variable and dependent on the waiting time for the next replenishment. The major objective is to determine the optimal selling price, the length of time in which there is no inventory shortage, and the replenishment cycle time simultaneously such that the total profit per unit time has a maximum value. An algorithm is developed to find the optimal solution, and numerical examples are provided to illustrate the theoretical results. A sensitivity analysis of the optimal solution with respect to major parameters is also carried out.[[incitationindex]]SCI[[booktype]]紙

Pricing and inventory control policy for non-instantaneous deteriorating items with time- and price-dependent demand and partial backlogging

Determining the optimal inventory control and selling price for deteriorating items is of great significance. In this paper, a joint pricing and inventory control model for deteriorating items with price- and time-dependent demand rate and time-dependent deteriorating rate with partial backlogging is considered. The objective is to determine the optimal price, the replenishment time, and economic order quantity such that the total profit per unit time is maximized. After modeling the problem, an algorithm is proposed to solve the resulted problem. We also prove that the problem statement is concave function and the optimal solution is indeed global

Optimal dynamic pricing and replenishment policies for deteriorating items

Marketing strategies and proper inventory replenishment policies are often incorporated by enterprises to stimulate demand and maximize profit. The aim of this paper is to represent an integrated model for dynamic pricing and inventory control of deteriorating items. To reflect the dynamic characteristic of the problem, the selling price is defined as a time-dependent function of the initial selling price and the discount rate. In this regard, the price is exponentially discounted to compensate negative impact of the deterioration. The planning horizon is assumed to be infinite and the deterioration rate is time-dependent. In addition to price, the demand rate is dependent on advertisement as a powerful marketing tool. Several theoretical results and an iterative solution algorithm are developed to provide the optimal solution. Finally, to show validity of the model and illustrate the solution procedure, numerical results are presented

Supply chain production model with preservation technology under fuzzy environment

In this paper, an attempt is made to characterize the preservation technology for deteriorating items to reduce the deterioration rate. This model assumes a single producer and single supplier and formulates a production model with a time varying rate of deterioration rate. Here production and demand are treated as a fuzzy variables and total cost is minimized for both the crisp and fuzzy model. Shortage is allowed on the supplier’s part, which is partially backlogged. A solution procedure is presented to determine an optimal replenishment cycle and total cost per unit time, which is a convex function of preservation technology cost. Results have been validated with relevant example. In a way, the proposed model provides a unique theory to reduce the deterioration rate for the production model

Supply chain finance for ameliorating and deteriorating products: a systematic literature review

Ameliorating and deteriorating products, or, more generally, items that change value over time, present a high sensitiveness to the surrounding environment (e.g., temperature, humidity, and light intensity). For this reason, they should be properly stored along the supply chain to guarantee the desired quality to the consumers. Specifically, ameliorating items face an increase in value if there are stored for longer periods, which can lead to higher selling price. At the same time, the costumers’ demand is sensitive to the price (i.e., the higher the selling price the lower the final demand), sensitiveness that is related to the quality of the products (i.e., lower sensitiveness for high-quality products). On the contrary, deteriorating items lose quality and value over time which result in revenue losses due to lost sales or reduced selling price. Since these products need to be properly stored (i.e., usually in temperature- and humidity-controlled warehouses) the holding costs, which comprise also the energy costs, may be particularly relevant impacting on the economic, environmental, and social sustainability of the supply chain. Furthermore, due to the recent economic crisis, companies (especially, small and medium enterprises) face payment difficulties of customers and high volatility of resources prices. This increases the risk of insolvency and on the other hand the financing needs. In this context, supply chain finance emerged as a mean for efficiency by coordinating the financial flow and providing a set of financial schemes aiming at optimizing accounts payable and receivable along the supply chain. The aim of the present study is thus to investigate through a systematic literature review the two main themes presented (i.e., inventory management models for products that change value over time, and financial techniques and strategies to support companies in inventory management) to understand if any financial technique has been studied for supporting the management of this class of products and to verify the existing literature gap