An optimal procurement policy for items with an inventory level-dependent demand rate and fixed lifetime

An optimal procurement policy for items with an inventory level-dependent demand rate and fixed lifetime

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Article ID: iaor20012163
Country: Netherlands
Volume: 127
Issue: 3
Start Page Number: 537
End Page Number: 545
Publication Date: Dec 2000
Journal: European Journal of Operational Research
Authors: ,
Keywords: deteriorating items
Abstract:

This paper investigates an optimal procurement policy for items with an inventory level-dependent demand rate and fixed lifetime. The demand rate is assumed to be a function of current inventory level and each unit has its fixed expiry date. So any units which remain unused by their expiry date are considered outdated, and must be disposed of. For the system presented, a mathematical model and solution methodology were developed. Sensitivity of the decision variables to changes in the parameter values is examined and future research needs are discussed in brief.

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