| Article ID: | iaor20112555 |
| Volume: | 10 |
| Issue: | 3 |
| Start Page Number: | 257 |
| End Page Number: | 276 |
| Publication Date: | Mar 2011 |
| Journal: | International Journal of Operational Research |
| Authors: | Chaudhuri Kripasindhu, Khanra Sudhansu |
| Keywords: | backorders, deteriorating items, economic order model, sensitivity analysis |
In this paper, an order level inventory model is discussed with the demand rate that is a continuous quadratic function of time. It is assumed that a constant fraction of the inventory deteriorates per unit time and shortages in inventory are allowed and completely backlogged. The effect of inflation and time value of money are taken into account, considering both internal and external inflation rates. A numerical example is shown to illustrate the model and sensitivity analysis of the optimal solution with respect to the parameters of the system is carried out.