INVENTORY MODEL FOR TIME DEPENDENT HOLDING COST AND DETERIORATION WITH SALVAGE VALUE AND SHORTAGES

In this paper, a deterministic inventory model is developed for deteriorating items in which shortages are allowed and salvage value is incorporated to the deteriorated items. In this model the demand rate is constant, deterioration rate is time dependent with weibull’s distribution and holding cost is a linear function of time. The model is solved analytically by minimizing the total inventory cost. Numerical analysis is provided to illustrate the solution and application of the model. The model can be applied to optimizing the total inventory cost for the business enterprises where holding cost and deterioration rate both are time dependent and salvage value is incorporated to the deteriorated items.