Abstract
A deterministic inventory model is developed by assuming that the demand rate is stock-dependent and the items deteriorate at a constant rate θ. The expression for the average net profit π over one production run is derived and its optimization with respect to the decision variables Q (initial stock) and T (duration of a production cycle) is carried out. This leads to two highly nonlinear equations which are solved by using a subroutine NEQNF in IMSL (MATH Library) in CYBER 180/480A computer system. The optimal solution so derived is compared with that for the no-deterioration (θ = 0) case. Sensitivity of the optimal solution to changes in parameter values is examined. Several aspects of the functional form for the demand rate are considered in a separate section. Finally, the salient features of the problem and its solution are discussed in brief.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.