Abstract
In the past years researchers have developed EOQ models under constant deterioration and demand rates. The major problem is to control the damages, spoilage of items produced by companies. This paper derives an Economic Order Quantity model for deteriorating products allow for (i) profit maximization objective and (ii) demand as a function of selling price. Mathematical models are derived under three different circumstances i.e. (i) $$ T \le m$$ , (ii) $$ m< T < n$$ and (iii) $$T \ge n$$ . Then, we develop an algorithm to determine the optimal total profit. Numerical examples are presented to illustrate the solution algorithm. The main objective is to maximize the total profit. Sensitivity analysis is provided to discuss the variations with changes of several key parameters in the optimal solution. The second order approximations are used for exponential terms to find closed form solution.
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