| Article ID: | iaor20101855 |
| Volume: | 124 |
| Issue: | 2 |
| Start Page Number: | 388 |
| End Page Number: | 394 |
| Publication Date: | Apr 2010 |
| Journal: | International Journal of Production Economics |
| Authors: | Hsu P H, Wee H M, Teng H M |
| Keywords: | deteriorating items |
The objective of this study is to develop a deteriorating inventory policy when the retailer invests on the preservation technology to reduce the rate of product deterioration. A solution procedure is presented to determine an optimal replenishment cycle, shortage period, order quantity and preservation technology cost such that the total profit per unit time is maximized. A numerical example and sensitivity analysis are presented to illustrate the model.