Economic Ordering Policy of Inventory Model with Exponential Declining Demand Considering Production and Non Production Periods for Single Vendor and Multiple Buyers

Abstract

In a production inventory system , the manufacturer produces the items at a particular production rate, dispatches the order quantities to the customers in specific intervals and stores the excess inventory for the subsequent deliveries. In the real life situations inventory manager has to hold the thousand of items in the inventory and also in a competitive market the aim of the vendor and the buyer is to maximize their profit, so in general an integrated policy is required by the vendor and the buyer. In the real life, decay and deterioration occur in some of the products such as fruits, milk products, vegetables and medicines. Various models have been developed in literature for deteriorating item with constant demand. However, in case of the items like food grains, fashion apparels and electronic equipments etc. which have a fixed shelf life and which decreases with time during the end of the season, an inventory model with exponential declining demand rate has been proposed. The present work has been divided into three chapters. In Chapter 1, the introduction of some inventory models have been discussed and the literature related to the topic has been given briefly. In Chapter 2, Economic Ordering policy of deteriorated item for Vendor and Buyer (Yang andWee (2000)) has been considered in which constant demand rate is replaced by the exponential declining function of time and the same approach used by yang and wee (2000) is applied to obtain the optimal solution. A numerical example is presented to demonstrate the model and sensitivity analysis of various parameters is carried out. In Chapter 3, the inventory model considered in chapter 2 is extended for single vendor and multiple buyers with exponential declining demand rate. Numerical example is also mentioned in the support of the model.