ECONOMIC PRODUCTION LOT-SIZE MODEL FOR DETERIORATING ITEMS WITH PARTIAL BACK-ORDERING

This paper formulates an economic production policy for deteriorating items with partial back-ordering. An implicit assumption in most inven tory control models is that when there is a shortage, either complete back-ordering or complete lost sale is assumed. Such an assumption is not always tenable in view of the different responses by customers dur ing stockout. In this paper, we develop an economic production plan fo r deteriorating items with partial back-ordering. Two numerical exampl es are used to illustrate the theory. Computational results indicate t hat the policy of our model leads to lower cost.