The Price and Production Level of the Deteriorating Inventory System.

Abstract

This paper presents a modified model for a deteriorating inventory system determining price and production levels. Specifically, the exponential distribution is used to represent the distribution of the time to deterioration. The optimal production lot size is derived under conditions of continuous review, constant demand and no shortages. The sensitivity to changes in perishability and product price is considered. Finally, a numerical example is solved to show the impact of price and deterioration and to derive the optimal production lot size.

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Document Details

Document Type
Technical Report
Publication Date
Sep 01, 1983
Accession Number
ADA134972

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  • D. W. Kim

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  • Air Force Institute of Technology

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