The effects of inflation and the time value of money on some inventory systems

Chandra, M. Jeya; Bahner, Michael L.

doi:10.1080/00207548508904740

Cited by 98 publications

(32 citation statements)

References 4 publications

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“…Misra (1979) simultaneously considered the timevalue of money for internal as well as external inflation rate, and analyzed the influence of interest rate and inflation rate on replenishment strategy. Chandra and Bahner (1985) extended the result in Misra's (1979) model to allow for shortages. Hariga (1995) extended the study to analyze the effects of inflation and time-value of money on an inventory model with time-dependent demand rate.…”

Section: Literature Reviewmentioning

confidence: 99%

Inventory Control with Fuzzy Inflation and Volume Flexibility under Random Planning Horizon

Urvashi¹,

Singh²

2013

IJCA

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The objective of this paper is to develop an inventory model with fuzzy inflation and multi variant demand rate. A new demand rate introduced which depends on price, quality and time. Planning horizon is random in nature for manufacturing company. Production rate is taken to be flexible in nature which depends on the technology frequency, capital investment and its elasticity and number of labour. Model is developed for both crisp and fuzzy environment. Numerical example is cited to illustrate the results and its significant features. Finally, to study the effect of changes of quality, inflation and planning horizon sensitivity analysis is carried out.

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Section: Literature Reviewmentioning

confidence: 99%

Inventory Control with Fuzzy Inflation and Volume Flexibility under Random Planning Horizon

Urvashi¹,

Singh²

2013

IJCA

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“…Mishra also developed a discount model in which the effect of both inflation and time value of money was considered. Chandra and Bahner [4] had also developed model under inflation and time value of money. Chang [3] presented model for the situation where the demand rate is a time-continuous function and items deteriorate at a constant rate with partial backlogging.…”

Section: Introductionmentioning

confidence: 99%

“…Jamal et al [10] further generalized the model to allow for shortages and deterioration. Teng [11] considered the EOQ under condition of permissible delay in payment which is further extended by Ken Chung Kun and Yun-FuHuang [4] for limited storage capacity. Goyal [12] developed the optimal pricing and ordering policies for items under permissible delay.…”

Section: Introductionmentioning

confidence: 99%

An Optimal Inventory Policy for Items having Linear Demand and Variable Deterioration Rate with Trade Credit

Sarbjit¹,

Shivraj²

2009

J. of Mathematics and Statistics

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Problem statement: Demand considered in most of the classical inventory models is constant, while in most of the practical cases the demand changes with time. In this study model has been framed to study the items whose demand changes with time and deterioration rate increases with time. The effect of permissible delay is also incorporated in this study. The objective of this research is to develop an inventory model for perishable items whose perish-ability rate as well as demand increases with time Approach: Firstly, problem is framed in the form of linear differential equation model and this model had been solved using general solution techniques of linear differential equations. The solution obtained gives the inventory level at any particular time of the cycle period. With the help of this inventory level, total as well as average inventory cost has been obtained. Results:This study developed a model to determine an optimal order quantity by using calculus technique of maxima and minima. Thus it helps retailer to decide its optimal ordering quantity under the constraints of variable deterioration rate and linear pattern of demand. Conclusion: Numerical solution of the suggested model had also been proposed, the above model can be converted into constant demand model, or for items having no deterioration. This study can further be extended for items having some other demand pattern, also time value of money and inflation can be incorporated in this model to make it more realistic and present business environment suited.

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“…Buzacott [2] investigated the effects of inflation rate on the EOQ formula and the pricing policies. Chandra and Bahner [3] examined the discounting effects of inflation on the optimal inventory policies of the order-level system and economic lot-size system. Grubbstrom and Kingsman [10] applied the net present value principle to consider the problem of determining the optimal ordering quantities of a purchased item where there are step changes in price.…”

Section: Introductionmentioning

confidence: 99%

A Net Present Value Approach in Developing Optimal Replenishment Policies with Allowable Shortages for a Product Life Cycle

Weng

2015

Int. J. Appl. Comput. Math

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In this paper, we utilize a net present value approach to devise replenishment policy with allowable shortages in the finite planning horizon by considering a general, time-varying, continuous, deterministic demand function for a product life cycle. We consider four possible alternatives for the inventory problem in the shortage models. (1) It starts with an instant replenishment and ends with zero inventories, (2) It starts with an instant replenishment and ends with shortages, (3) It starts with shortages and ends with zero inventories, or (4) It starts and ends with shortages. We investigate the optimal number of inventory replenishments, the corresponding optimal inventory replenishment time points and the shortage time points and analytically compare these four inventory models based on minimizing the total relevant cost. A complete search procedure is developed to find the optimal solution by employing the properties derived in this paper and the well-known Nelder-Mead algorithm. Also, several numerical examples are carried out to illustrate the features of these models by utilizing the search procedure developed in this paper. Then various models are analytically compared, and identified the best alternative among them based on minimizing total relevant costs. The ith beginning time point of shortage, i = 1, 2, . . . , n (decision variables) (time point) α, β the constant parameters for the revised Beta distribution demand function f (t) the demand function at time t, and 0 ≤ t ≤ H, as shown in Eq. (1) Keywords

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The effects of inflation and the time value of money on some inventory systems

Cited by 98 publications

References 4 publications

Inventory Control with Fuzzy Inflation and Volume Flexibility under Random Planning Horizon

Inventory Control with Fuzzy Inflation and Volume Flexibility under Random Planning Horizon

An Optimal Inventory Policy for Items having Linear Demand and Variable Deterioration Rate with Trade Credit

A Net Present Value Approach in Developing Optimal Replenishment Policies with Allowable Shortages for a Product Life Cycle

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