An Inventory Model with an Inventory-Level-Dependent Demand Rate and Relaxed Terminal Conditions

Abstract

This paper investigates an inventory system with an inventory-level-dependent demand rate followed by a constant demand rate. The analysis previously conducted on this model imposed a terminal condition of zero inventory at the end of the order cycle. This condition is not warranted for systems with inventory-level-dependent demand rates, even for deterministic models. This paper relaxes this restriction, and an appropriate model is developed.

Keywords:

• Inventory
• Optimization