Abstract
Experts believe that a large percentage of total corporate capitals lie in organizational inventories. Therefore, a more thorough and intelligent review of the inventory issue empowers organizations to optimally make use of all their resources to achieve better efficiency and effectiveness. This might, in turn, help organizations in reaching their goals. In this study, an inventory model under general discount and stochastic deteriorating conditions is developed. Deterioration was studied as a Stochastic variable while other variables were deterministic. The objective of this study was to reduce the expected cost of the whole system. First, the reorder point was determined by the EOQ model, and then other price cut points (due to discount or inventory Deterioration) were determined. Finally, the total cost of the system was computed for all points, by which the reorder point had the lowest cost. The developed model was further analyzed through a numerical example.
Highlights
Provision of demands for goods has turned logistics and inventory operations into delicate undertakings for every industrial organizations
The capital invested in inventory stocks holds a great share in every economic sector
Inventory control is an operation that ensures required organizational items are delivered to the respective operational segment with regards to time, place, quantity, quality and cost[9]
Summary
Provision of demands for goods has turned logistics and inventory operations into delicate undertakings for every industrial organizations. The capital invested in inventory stocks holds a great share in every economic sector. This huge capital amounts for a great share of GDP. The main objective of inventory planning and control is to adopt the best reordering and inventory maintenance policies by analyzing costs and conditions[10]. It is assumed that the system should not face inventory shortage since it would incur high costs on the system. This model is intended for Deteriorateable products, i.e. might become unfashionable or wasted and usable
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