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Optimal Ordering Policy for Deteriorating Items Having Constant Demand and Deterioration Rate
Institute of Management Technology, Nagpur, India
- 1 Institute of Management Technology, Nagpur, India
Theoretical Economics Letters·Volume 07 (2017)·Pages 2152–2158·Published 21 November 2017·DOI10.4236/tel.2017.77146
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Abstract
This study derives an optimal ordering policy for perishable products. Here the demand considered is constant demand and items considered have a con stant rate of deterioration. The sensitivity analysis of model has been done and formula for calculating optimal ordering quantity has been derived. The model follows the classical EOQ model, i.e. the point of minima is the point where the total ordering cost is equal to the sum of holding costs and deterioration cost.
KeywordsPerishable GoodsOptimalitySensitivityEconomic Order Quantity
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