A study of inventory model for deteriorating items with price and stock dependent demand under the joined effect of preservation technology and price discount facility

Abstract

The purpose of this paper is to develop an economic order quantity model for deteriorating items with price and stock dependent demand, deterioration rate with preservation technology and price discount facility. The proposed model focused on two things. The first one is the consideration of the fact that the deterioration rate can be reduced by the use of preservation technology investment and the second one is using the assumption that the unit purchase cost has a hostile relationship with the order size to maximize the total profit. The concept of salvage value is considered and incorporated in this model. The solution procedure of proposed optimization model is illustrated by a couple of numerical examples. Concavity of the average profit function is shown by plotting graphs. Sensitivity analysis is performed to study the effect of changing the value of all parameters in the proposed maximization model.