Analysis of inventory systems with deteriorating items

Abstract

Two economic order quantity models (1 and II) for inventory items with deterioration rates are developed. In Model I, the demand is deterministic in nature, production rate is finite, and shortages are allowed. In Model II, the demand is given by a random variable having the p.d.f. of a normal distribution, the deterioration rate is given by a two-parameter Weibull distribution, and shortages are allowed. Numerical solutions are utilized to obtain optimal values for the order quantity (Q) and cycle time (T). The models are then applied to a real-life situation of the Stewart Clay Company. New Jersey