Economic Production Quantity Model for Deteriorating Items with Weibull Deterioration Rate over the Finite Time Horizon

Abstract

In the present paper we have considered a production supply chain and developed two models for production supply cycle. These models are (i) The optimum total cost model and (ii) The maximum inventory level model. We have assumed constant demand rate for deteriorating inventory and considered three parameter Weibull distributions for deterioration rate with finite time horizon. We have also considered three different level of production in one cycle with shortages allowed. In real world of production and manufacturing market, EPQ models are playing role of an effective tool. The objective of our work is to find optimal production quantity and minimize total cost per cycle. Our work will be useful for the organizations which are going to launch new product in the market or newly established production organizations where at starting organizations are not aware about the production size and changing their production level according to the market demand. These models will help to avoid surplus stock or shortages in business organizations and reduce holding cost; deterioration cost etc. The objective of this paper is to find optimal total cost and optimal production quantity for one cycle. At last numerical example and sensitivity analysis is given to illustrate the result. We have used Mathematica 0.9 to solve equations, calculation and plotting graph.