Effect of deteriorating items on the instantaneous replenishment model with backlogging

The physical characteristics of stocked items dictate the nature of invento ry policies implemented to manage and control. Traditional economic order q uantity models (EOQ) assume that items stocked preserve their characteristi cs while in inventory and some of them do not allow planned shortages. As t his assumption arises the question of how reliable the EOQ models are when items stocked deteriorate over time. This paper introduces a modified EOQ m odel in which it assumes that the stocked items are governed by a deteriora tion factor due to their nature and where the carrying cost is very expensi ve such that planned shortages may be advisable. A mathematical model is de veloped and a numerical example is provided to illustrate the solution proc edure. (C) 1999 Elsevier Science Ltd. All rights reserved.