Goyal’s inventory model revisited

Abstract

We study the inventory model with deteriorating items and time-varying demand and shortages created by Goyal, Morin and Nebebe in 1992. Recently, Chang and Dye published a paper in the Journal of the Operational Research Society to extend this inventory model. However, their structure for the shortage cost and the opportunity cost due to lost sales had problem. The purpose of this short note is threefold. First, we point out there is a necessary condition to run the algorithm of Chang and Dye. Second, we prove that for increasing demand the necessary condition is satisfied. Third, for the general time-varying demand, we offer an alternative to avoid the problem. A numerical example is provided to illustrate our procedure.