Analysis of inventory control model with shortage under time-dependent demand and time-varying holding cost including stochastic deterioration

In this paper, a deterministic inventory control model with deterioration is developed. Here, the deterioration rate follows stochastic deterioration, especially Weibull distribution deterioration. A time-dependent demand approach is introduced to show the applicability of our proposed model and to...

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Bibliographic Details
Published inAnnals of operations research Vol. 260; no. 1-2; pp. 437 - 460
Main Authors Pervin, Magfura, Roy, Sankar Kumar, Weber, Gerhard-Wilhelm
Format Journal Article
LanguageEnglish
Published New York Springer US 2018
Springer
Springer Nature B.V
Subjects
Business and Management
Combinatorics
Demand analysis
Inventory
Inventory control
Mathematical models
Operations research
Operations Research/Decision Theory
Optimization
Order quantity
Parameter sensitivity
Replenishment
S.I.: Advances of OR in Commodities and Financial Modelling
Sensitivity analysis
Shortages
Stochastic models
Theory of Computation
Time dependence
Weibull distribution
Time-varying holding cost
Stochastic deterioration
Shortage
Time-dependent demand
91B24
91B70
90B05
Inventory
Optimization
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Summary:In this paper, a deterministic inventory control model with deterioration is developed. Here, the deterioration rate follows stochastic deterioration, especially Weibull distribution deterioration. A time-dependent demand approach is introduced to show the applicability of our proposed model and to be up-to-date with respect to time. The main purpose of the paper is to investigate the optimal retailer’s replenishment decisions for deteriorating items including time-dependent demand for demonstrating more practical circumstances within economic-order quantity frameworks. Keeping in mind the criterion of modern era, we consider that the holding cost is totally dependent on time, and shortages are allowed for this model. Subject to the formulated model, we minimize the total inventory cost. The mathematical model is explored by numerical examples to validate the proposed model. A sensitivity analysis of the optimal solution with regard to important parameters is also carried out to elaborate the quality, e.g., stability, of our result and to possibly modify our model. The paper ends with a conclusion and an outlook to future studies.
ISSN:0254-5330
1572-9338
DOI:10.1007/s10479-016-2355-5