An inventory model for deteriorating items with time dependent holding cost and shortages under permissible delay in payment

Abstract

This study is motivated by the work of Khanra et al. (2011, pp.1-9). We have revisited their model taking into account the following points: 1) the demand rate as a + bt + csin(t); 2) shortages are allowed; 3) delay in payment is permissible under three different cases, i.e., case I: the credit period is less than the time of occurrence of shortages, case II: the credit period is greater than the time of occurrence of shortages and case III: the credit period is greater than the cycle time. Under these aforesaid assumptions, an inventory model is developed and solved to obtain optimal solutions for inventory system with deteriorating items. An algorithm is proposed to solve the developed model. Finally, numerical examples are given in support of the developed model and sensitivity analysis is carried out with suitable example. Justification for extension of the existing model in literature with above mentioned demand function and linear time dependent holding cost is also discussed in this paper.