Inventory policies for deteriorating items with time-price backlog dependent demand

ABSTRACT

The effect of stock-out plays a major role in customer's decision-making. This article consists of an inventory model with an assumption of customer's demand, which is affected by shortages; that is for the period of shortages, the demand rate declines in proportion to the existing backlogging. Also, the customer's demand is expressed as a function of time and price, which is appropriate for the products for which demand increases initially and after sometime it starts to decrease. Furthermore, for computing the total profit, the backlogged demand rate is approximated by a piecewise constant function. Depending on the cycle length $T$, total six models are derived with/without utilisation of preservation technology. Finally, in order to validate the derived models, numerical examples along with sensitivity analysis is undertaken, which extracts some fruitful managerial insights.

KEYWORDS:

• EOQ Inventory model
• time-price-dependent demand rate
• shortages
• stock-out
• backlogging
• deterioration
• preservation technology

Acknowledgement

The authors are very much thankful to the reviewers for their deep and thorough review. The authors thank DST-FIST File # MSI-097 for technical support to department.

Disclosure statement

No potential conflict of interest was reported by the author(s).

ORCID

Nita H. Shah http://orcid.org/0000-0003-1605-4778

Monika K. Naik http://orcid.org/0000-0002-4077-3855

Additional information

Funding

This work was supported by DST-FIST (MSi-097 technical support to department).

Notes on contributors

Nita H. Shah

Nita H. Shah is a Professor and Head in the Department of Mathematics at the Gujarat University, Ahmedabad, Gujarat, India. She has 20 years of research experience in inventory management, forecasting and information technology and information systems. She has published 300+ articles in international journals, including APJOR (Singapore), International Journal of Production Economics, Omega, CCERO (Belgium), ECPE (Romania), Measuring, Control and Simulation (France), JIOS (India), IJOMS (India), Industrial Engineering (India), European Journal of Operational Research, IJOR, IJMOR, IJBPSCM, IJLSM, IJSSOL etc.

Monika K. Naik

Monika K. Naik is an assistant professor in Parul University, Gujarat, India. Her research interests are in the field of supply chain inventory modelling for different payment options. Her articles have been published in Revista Investigacion Operacional, IJIR, IJAER, and IJMEMS.