Our model deals with the stock-dependent demand as exhibiting huge volume
of commodities leads to more costumers and augment the trading of the goods.
As some goods like vegetables, fruits, medicines deteriorate after a period
of time, resulting in economical and financial losses, we took this factor
into consideration and included a constant deterioration rate, controlled by
suitable preservation technologies. Preservation technology investments
are made for the valuable business as it helps to decrease the rate of
deterioration. Our model allows shortages, and back-ordering is permissible
to manage the loss that occurs due to perishable objects and shortages. The
objectives are to find the optimal cycle time, preservation technology cost,
and positive inventory time. The paper also proves the convexity of total
cost through graphs with respect to decision variables. A sensitivity
analysis of decision variables with respect to different inventory parameters
is carried out.
This paper develops an overtime production model for demand rate to be a function of price and stock-level. Companies manufacturing rate fluctuates with the change in stock-level and demand rate. To control the deterioration up to some extent, the system introduces preservation technology investment. The article permits a twolevel credit policy for flexible financing. The model calculates feasible profit value under preservation technology investment, production period and selling price. Conclusively, a sensitivity analysis related to different inventory parameters is performed to study the dependency of optimal values on parameters.
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