Abstract
The physical characteristics of stocked items dictate the nature of inventory policies implemented to manage and control. The traditional economic order quantity model (EOQ ) assumes that items stocked preserve their characteristics during their stay in inventory. The question is how reliable are the EOQ modelswhen items stocked deteriorate over time. This paper introduces a modified EOQ model in which it assumes that a percentage of the on-hand inventory is wasted due to deterioration. A mathematical model is developed and numerical examples provided to illustrate the solution procedure.
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