Inventory analysis for deteriorating items with non-linear demand function

Abstract

In this thesis entitled “Inventory Analysis for Deteriorating Items with Non-Linear Demand Function”, the effects of inflation and cash flow are taken into account under a trade-credit policy of discount and without discount with time. In this study, two inventory models for deteriorating items consisting of the ordering cost, unit cost, opportunity cost, deterioration cost and shortage cost with discount and without discount policy have been considered. The formulated first model deals with the optimum replenishment policy of a deteriorating item in the presence of inflation and a trade credit policy without shortage case. In addition, the second model deals with the inventory shortage policy. In these models, instead of linear demand function nonlinear exponential function of time for deteriorating items with deterioration rate with respect to inventory shortage policy have been investigated. In order to validate as well as to estimate the cash flow in the model, numerical examples with the sensitivity of the several parameters have been considered. The formulated models have been solved with the help of bisection method deploying MATLAB. From the results of the numerical examples, it is observed that if the cost of ordering, opportunity, inventory carrying, holding and inflation rate increase then the cash flow increases gradually on both cases. On the other hand, in both cases, if the unit cost, shortage cost, deterioration rate, opportunity cost and deterioration cost increase, then the cash flow gradually decreases.