The Optimization and sensitivity of deteriorating inventory system with partial backlogging.

Abstract

In this study, a single item deterministic inventory model is considered, in which items are subject to constant deterioration and shortages are allowed. The unsatisfied demand is backlogged partially, which is a function of waiting time. The optimum order quantity is obtained by minimizing the total cost. The results are illustrated through numerical example. The convexity of the cost function is shown numerically. Sensitivity analysis is carried out to understand the effect of critical parameters on decision variables and total cost of the inventory system.