Optimal replenishment policy for perishable seasonal products in a season with ramp-type time dependent demand

Abstract

A single item order level inventory model for a seasonal product is discussed where the demand rate is represented by a ramp-type time dependent function. A constant fraction of on hand inventory deteriorates per unit time. Shortages are not allowed. The model is developed over a finite time horizon (time period of a season) to determine optimal replenishment policy by minimizing total system running cost of entire season. An algorithm is provided to find the solution of the problem. A numerical example is presented and sensitivity analysis of the model is carried out. The rationale for time dependent ramp-type demand is also discussed.