Article ID: | iaor200638 |
Country: | Netherlands |
Volume: | 162 |
Issue: | 3 |
Start Page Number: | 773 |
End Page Number: | 785 |
Publication Date: | May 2005 |
Journal: | European Journal of Operational Research |
Authors: | Moon Ilkyeong, Giri Bibhas Chandra, Ko Byungsung |
Keywords: | economic order, inflation, deteriorating items |
The items that incur a gradual loss in quality or quantity over time while in inventory are usually called deteriorating items. In reality, there are some items whose value or utility or quantity increase with time and those items can be termed as ameliorating items. In this paper, an effort has been made to incorporate these two opposite physical characteristics of stored items into inventory model. We develop models for ameliorating/deteriorating items with time-varying demand pattern over a finite planning horizon, taking into account the effects of inflation and time value of money. Optimal solutions of the proposed models are derived and the effects of amelioration/deterioration on the inventory replenishment policies are studied with the help of numerical examples.