Publication Date: 2024/02/20
Abstract: The determination of the accurate reorder point is a critical aspect of sustainable inventory management, particularly when dealing with deteriorating items. The reorder point signifies the inventory threshold at which initiating a new order is necessary to restock before depletion occurs.For deteriorating items, where the quality or usability of the product diminishes over time, precisely establishing the reorder point is of supreme importance.In this article an inventory model is developed to address the complex challenges of determination of perfect order size and reorderpoint associated with the optimal inventory planning of deteriorating items, under price-dependent demand and shortages resulting from supplier lead time. The proposed model integrates convex optimization techniques to develop a comprehensive framework for inventory control, considering the interplay of various factors affecting inventory levels.The research explores the trade-offs between ordering costs, holding costs, and stockouts, aiming to identify the optimal inventory policies that minimize overall costs while ensuring adequate service levels. To achieve this, the study employs convex optimization theory and sensitivity analysis. The suggested model undergoes validation using a numerical illustration. Ultimately, the model's behavior is visually depicted.
Keywords: Deterioration; Price-Dependent Demand; Reorder Point; Lead Time; Stockouts.
DOI: https://doi.org/10.5281/zenodo.10687645
PDF: https://ijirst.demo4.arinfotech.co/assets/upload/files/IJISRT24FEB326.pdf
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