A DETERMINISTIC INVENTORY MODEL FOR DETERIORATING ITEMS WITH STOCK-DEPENDENT DEMAND RATE

A deterministic inventory model is developed by assuming that the dema nd rate is stock-dependent and the items deteriorate at a constant rat e 0. The expression for the average net profit pi over one production run is derived and its optimization with respect to the decision varia bles Q (initial stock) and T (duration of a production cycle) is carri ed out. This leads to two highly nonlinear equations which are solved by using a subroutine NEQNF in IMSL (MATH Library) in CYBER 180/480A c omputer system. The optimal solution so, derived is compared with that for the no-deterioration (theta = 0) case. Sensitivity of the optimal solution to changes in parameter values is examined. Several aspects of the functional form for the demand rate are considered in a separat e section. Finally, the salient features of the problem and its soluti on are discussed in brief