To study the effect of inventory dependent consumption parameter for constant and time dependent holding cost

Abstract

Economic production quantity models are effectively used to control inventory. In the present work EPQ model has been developed to study the effect of demand parameters on holding cost and total inventory. Demand used is inventory dependent during inventory buildup time and constant demand has been used during inventory depletion period. Rate of deterioration is considered to be constant. A numerical example has been included to validate the model. The sensitivity analysis shows that, higher inventory can attract customer to buy more. The result of models indicates that, the holding cost and total inventory is sensitive to change in inventory dependent demand parameter. Increase in demand parameter decreases the holding cost and total inventory.