Retailer’s Optimal Ordering Policy for Deteriorating Items with Ramp-Type Demand under Stock-Dependent Consumption Rate

Abstract

In this paper, we investigated an inventory model for deteriorating items with a ramp-type demand under stock-dependent consumption rate. The model allows for shortage and complete backlogging of unfilled demand. The purpose of this article is to develop an optimal replenishment policy which maximizes the total profit per unit of time for the retailer. The necessary and sufficient conditions of the existence and uniqueness of the optimal solution are shown. Further, we establish a useful theorem to determine the optimal order quantity and replenishment time. Finally, several numerical examples are provided to illustrate the theoretical results, and sensitivity analysis of major parameters involved in the model is also examined.

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