On reducing excessive stock in the order-level lot-size system for decaying inventories

Recently Dave and Pandya investigated the question of inventory returns and special sales for the EOQ inventory system for items with a constant rate of deterioration. This paper extends their models by allowing shortages which are completely backlogged. Two inventory models are developed, one for an infinite planning horizon and another for a finite planning horizon, in which there is no delivery lead time and the rate of deterioration of the items in inventory is assumed to be constant. It is shown that, in the absence of deterioration, the models of Dave can be obtained as a special case of the inventory models developed here. Finally, derived results are illustrated by numerical examples.