Optimal inventory replenishment models for deteriorating items taking account of time discounting

This paper follows the discounted cash flow (DCF) approach to investigate i nventory replenishment problem for deteriorating items taking account of ti me value of money over a fixed planning horizon. We develop models and opti mal solutions with complete backlogging and without backlogging and prove t hat the total variable cost is convex. The results are discussed through nu merical examples. Sensitivity analysis of the optimal solution with respect to the parameters of the system is carried out.