A Deterministic Inventory Model of Deteriorating Items with Two Rates of Production, Shortages, and Variable Production Cycle

Abstract

A Continuous production control inventory model is developed for a deteriorating item having shortages and variable production cycle. It is assumed that the production rate is changed to another at a time when the inventory level reaches a prefixed level and continued until the inventory level reaches the level . The demand rate is assumed to be constant, and the production cycle T is taken as variable. The production is started again at a time when the shortage level reaches a prefixed quantity . For this model, the total cost per unit time as a function of , , S , and T is derived. The optimal decision rules for , , S , and T are computed. The sensitivity of the optimal solution towards changes in the values of different system parameters is also studied. Results are illustrated by numerical examples.