Impact of inflation on an Economic order quantity model with variable holding cost with trade credit.

Abstract

Inflation is considered as one of the required conditions for inventory model because the economic factor affect so many factors like rate of investment, demand level, labor cost, cost of raw material, rate of unemployment, productivity level, tax, liquidity etc. Here an inventory model for economic order quantity has been developed for the items having a variable holding cost with ramp type demand and inflation. The objective is to find out the retailer’s optimal inventory policy that maximize/minimize the total profit cost. Mathematical illustration of the result with the help of a numerical example has been shown. Sensitivity analysis is also provided to check the stability of this model.