Open AccessAn inventory model for estimation of deterioration with time-dependent demand and storage cost
Author(s) -
J I Ichwanto,
Julius Dharma Lesmono,
Taufik Limansyah
Publication year - 2021
Publication title -
journal of physics. conference series
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.21
H-Index - 85
eISSN - 1742-6596
pISSN - 1742-6588
DOI - 10.1088/1742-6596/1940/1/012012
Subject(s) - economic shortage , holding cost , order (exchange) , inventory cost , sensitivity (control systems) , carrying cost , economic order quantity , total cost , operations research , lead time , storage model , inventory theory , operations management , computer science , inventory management , economics , microeconomics , business , mathematics , engineering , supply chain , marketing , operating system , linguistics , philosophy , finance , electronic engineering , government (linguistics)
An inventory consists of items that are stocked temporarily before they are used or sold at a later time. An inventory model is required to enable the retailer to determine the optimal order quantity. The main goal is to determine how many items should be ordered and when to order to minimize the total cost. If retailers order too much, the holding cost will increase because the items that have to be stored increase and the items will deteriorate. If they order too little, then shortages may occur because the inventory could not meet the demand. In this paper, a mathematical model for inventories with deterioration, time-dependent demand, and time-dependent storage cost will be developed. A sensitivity analysis has been performed to examine how the changes in the model parameters affect the optimal solution. It can be concluded that if the deterioration rate decreases and the demand rate increases, then the total cost will also decrease.