An EPQ model for deteriorating items with price sensitive demand and shortages. (2015)

• Record Type: Journal Article
• Authors: Sharma, Sanjay; Singh, S.R.; Ram, Mangey
• Is Part Of: International journal of operational research. Volume 23:Number 2(2015)
• Page Start: 245
• Page End: 255
• Publication Date: 2015
• Subjects: deterioration rate -- exponential demand -- price sensitive demand -- EPQ model -- economic production quantity -- deteriorating items -- shortages -- inventory modelling -- inventory management -- selling price -- production rate -- planning horizon -- partial backlogging; Operations research -- Periodicals; 003.05
• Languages: English
• ISSNs: 1745-7645

Abstract

In the classical inventory models, the demand rate is regularly assumed to be either constant or time-dependent, but independent of the stock levels. Since the demand rate is not only influenced by stock level, but also is associated with the selling price. Therefore, we also take into account the selling price and then establish an EPQ model, in which the demand rate is a function of the selling price. In this paper, we consider the production rate as demand dependent, which is more realistic in our general life. The planning horizon is infinite. The time dependent rate of deterioration is taken into consideration and demand rate is price dependent. We consider that shortages are allowed and partially backlogged.