Replenishment policy for single item inventory model with money inflation

Abstract

Finding out the replenishment policy is a hot topic of research in inventory management. In this article, we propose an optimal replenishment policy by considering stock dependent consumption rate for non instantaneous deteriorating items with money inflation and time discounting. In this model shortages are allowed and backlogging is partial. Solution procedure is given and explained with examples. The impact of various parameters of the system on the optimal solution is analyzed by carrying out sensitivity analysis with perturbations in various parameters.