An order level inventory model for deteriorating items with partial backlog and partial lost sales

Abstract

In this study, an order level inventory model, continuous in unit and time is developed for deteriorating items. The model is developed under deterministic demand, instantaneous delivery. In the first section order level inventory model for deteriorating items with single warehouse is developed where shortages are taken into consideration. Shortages are partially backlogged and partially lost sales. Maximum profit is calculated. An example is given to illustrate the model. In the second section, order level inventory model for deteriorating items with two warehouses is developed. Shortages are partially backlogged and partially lost sales. Minimum inventory cost is obtained and profit is maximised. An example is given to illustrate the model along with sensitivity analysis.