Optimization Policy of a System for Deteriorating Items with Customer Returns and Partial Backlogging under Inflation

Abstract

In this paper we investigate the inventory system of deteriorating item under inflation. We consider that the demand depends on three factors: stock, time and price. Customer returns are also considered as the function of both price and demand. Shortage is allowed and partially backlogged. Our objective is to optimize the profit function. We have also provided numerical example and sensitivity analysis to illustrate both the models.