HEURISTIC MODELS FOR DETERIORATING ITEMS WITH SHORTAGES AND TIME-VARYING DEMAND AND COSTS

In this article, we develop and analyse two heuristic models for the i nventory replenishment problem in which the demand rate, deterioration rate, ordering cost, holding cost and shortage cost are all assumed t o vary with time. Shortages in inventory are allowed and are completel y backlogged. Our objective is to determine the optimal replenishment policy of the inventory system whether or not a finite planning horizo n exists. Both the heuristic models are illustrated with the help of a numerical example. Finally, the sensitivity analysis is also presente d for the heuristic rule that outperforms the other one.