A Complete Solution Procedure for a Replenishment Policy with Deteriorating Items, Stock-Dependent Consumption Rate and Shortages Under Infl ation and Time Discounting

Abstract

Hou [European Journal of Operational Research 168 (2006) 463-474] developed an inventory model for deteriorating items with stock-dependent consumption rate and shortages under inflation and time discounting. This paper will discuss the inventory model which is as same as that of Hou [7]. The main purpose of this note is to present a complete theorem and show the optimal solution k* exists and is unique. In addition, a few minor misprints in Hou [7] will also be corrected in this note. Finally, a numerical example is used to illustrate the application of this proposed model.

Keywords:

• inventory
• stock-dependent consumption rate
• deteriorating items
• inflation