African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4199

Full Length Research Paper

An inventory model for deteriorating items with stock-dependent selling rate and partial backlogging under inflation

Kuo-Lung Hou1*, Yung-Fu Huang2 and Li-Chiao Lin3
  1Department of Business Administration, Overseas Chinese University, Taiwan, ROC. 2Department of Marketing and Logistics Management, Chaoyang University of Technology, Taiwan, ROC. 3Department of Business Administration, National Chinyi University of Technology, Taiwan, ROC.
Email: [email protected]

  •  Accepted: 11 April 2011
  •  Published: 18 May 2011

Abstract

 

This paper presents an inventory model for deteriorating items with stock-dependent selling rate under inflation and time value of money over a finite planning horizon. In the model, shortages are allowed and the unsatisfied demand is partially backlogged at the exponential rate with respect to the waiting time. We establish the theoretical results and provide an efficient solution procedure to find the optimal number of replenishment and the cycle time. Then, the optimal order quantity and the total present value of profits are obtained. A numerical example and sensitivity analysis are presented to illustrate the proposed model and particular cases of the model are also discussed.

 

Key words: Inventory, stock-dependent demand, deteriorating, partial backlogging, inflation.