An optimal policy for deteriorating items with time-proportional deterioration rate and constant and time-dependent linear demand rate

Abstract

In this paper, an economic order quantity (EOQ) inventory model for a deteriorating item is developed with the following characteristics:The demand rate is deterministic and two-staged, i.e., it is constant in first part of the cycle and linear function of time in the second part.Deterioration rate is time-proportional.Shortages are not allowed to occur. The optimal cycle time and the optimal order quantity have been derived by minimizing the total average cost. A simple solution procedure is provided to illustrate the proposed model. The article concludes with a numerical example and sensitivity analysis of various parameters as illustrations of the theoretical results.