Nonlinear Phenomena in Complex Systems, 2006, Vol.9, No.1, pp.43-52

NONLINEAR PHENOMENA IN COMPLEX SYSTEMS
An Interdisciplinary Journal

2006, Vol.9, No.1, pp.43-52

Deterministic Inventory Model for Deteriorating Items with Stock Level-Dependent Demand, Shortage, Inflation and Time Discounting.
T. Roy and K. S. Chaudhuri

A deterministic inventory model over an infinite time-horizon is developed for a deteriorating item with shortages, taking the demand rate at any instant to be a function of the on-hand inventory (stock level) at that instant. To make it more realistic, the effects of inflation and time value of money are introduced. Two separate inflation rates: namely, the internal (company) and the external (general economy) are taken into account. Numerical examples of the results are considered for a given data set. Also the sensitivity analysis of the model is examined for changes in the parameters.
Key words: inventory, deterioration, stock-dependent demand, shortage, inflation, time-discounting

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