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In this paper, we have analysed a two-warehouse inventory model for deteriorating items with quadratic demand with time varying holding cost. The effect of permissible delay in payments is also considered, which is usual practice in most of the businesses i.e. purchasers are allowed a period to pay back for the goods brought without paying any interest. To make it more suitable to the present environment the effect of inflation is also considered. Our objective is to minimize the average total cost per time unit under the influence of inflation. Numerical examples are provided to illustrate the model and sensitivity analysis is also carried out for the parameters.

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2016

American Journal of Engineering Research (AJER)

e-ISSN: 2320-0847 p-ISSN : 2320-0936

Volume-5, Issue-6, pp-62-73

www.ajer.org

Research Paper

Open Access

Deterioration and Quadratic Demand Rate under Inflation and

Permissible Delay in Payments

U. B. Gothi1, Prachi Saxena2, Kirtan Parmar3

1

Head & Asso. Prof., Dept. Of Statistics, St. Xaviers College (Autonomous), Ahmadabad, Gujarat, India.

2

Research Scholar, Dept. Of Statistics, St. Xaviers College (Autonomous), Ahmadabad, Gujarat, India.

3

Adhyapak Sahayak, Dept. Of Statistics, St. Xaviers College (Autonomous), Ahmadabad, Gujarat, India.

ABSTRACT: In this paper, we have analysed a two-warehouse inventory model for deteriorating items with

quadratic demand with time varying holding cost. The effect of permissible delay in payments is also

considered, which is usual practice in most of the businesses i.e. purchasers are allowed a period to pay back

for the goods brought without paying any interest. To make it more suitable to the present environment the effect

of inflation is also considered. Our objective is to minimize the average total cost per time unit under the

influence of inflation. Numerical examples are provided to illustrate the model and sensitivity analysis is also

carried out for the parameters.

Keywords: Inventory model, Two-warehouse, Deterioration, Quadratic demand.

I.

INTRODUCTION

The main problem in an inventory management is to decide where to stock the goods. Generally, when

the products are seasonal or the suppliers provide discounts on bulk purchase, the retailers purchase more goods

than the capacity of their owned warehouse (OW). Therefore, the excess units over the fixed capacity w of the

owned warehouse are stored in rented warehouse (RW). Usually, the unit holding charge is higher in rented

warehouse than the owned warehouse, as the rented warehouse provides a better preserving facility resulting in

a lower rate of deterioration in the goods than the owned warehouse. And thus, the firm stores goods in owned

warehouse before rented warehouse, but clears the stocks in rented warehouse before owned warehouse.

Inventory models for deteriorating items were widely studied in the past but the two-warehouse

inventory issue has received considerable attention in recent years. Hartley [10] was the first person to develop

the basic two-warehouse inventory model. Chung and Huang [5] proposed a two-warehouse inventory model for

deteriorating items under permissible delay in payments, but they assumed that the deteriorating rate of two

warehouses were the same. An inventory model with infinite rate of replenishment with two-warehouse was

considered by Sarma [12]. An optimization inventory policy for a deteriorating items with imprecise lead-time,

partially/fully backlogged shortages and price dependent demand under two-warehouse system was developed

by Rong et al. [18]. Lee and Hsu [13] investigated a two-warehouse production model for deteriorating items

with time dependent demand rate over a finite planning horizon.

Earlier, in Economic Order Quantity (EOQ), it was usually assumed that the retailer must pay to the

supplier for the items purchased as soon as the items were received. In the last two decades, the influence of

permissible delay in payments on optimal inventory management has attracted attention of many researchers.

Goyal [9] first considered a single item EOQ model under permissible delay in payments. Aggarwal and Jaggi

[1] extended Goyals [9] model to the case with deteriorating items. Aggarwal and Jaggis [1] model was further

extended by Jamal et al. [2] to consider shortages. Chung and Huang [7] further extended Goyals [9] model to

the case that the units are replenished at a finite rate under delay in payments and developed an easy solution

procedure to determine the retailers optimal ordering policy. A literature review on inventory model under

trade credit is given by Chang et al. [8]. Teng et al. [19] developed the optimal pricing and lot sizing under

permissible delay in payments by considering the difference between the selling price and the purchase cost and

also the demand is a function of price. For the relevant papers related to permissible delay in payments see

Chung and Liao [6], Liao ([14], [15]), Huang and Liao [11].

Recently, Kirtan Parmar and U. B. Gothi [16] have developed order level inventory model for

deteriorating items under time varying demand condition. Devyani Chatterji and U. B. Gothi [4] have developed

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an integrated inventory model with exponential amelioration and two parameter Weibull deterioration. Ankit

Bhojak and U. B. Gothi [3] have developed inventory models for ameliorating and deteriorating items with time

dependent demand and inventory holding cost.

Parekh R.U. and Patel R.D. [17] have developed a two-warehouse inventory model in which they

assumed that the demand is linear function of time t. They took different deterioration rates and different

inventory holding costs in both OW and RW under inflation and permissible delay in payments.

In this paper, we have tried to develop a two-warehouse inventory model under time varying holding

cost and quadratic demand under inflation and permissible delay in payments. In the present work we have

considered same deterioration rate and same linear holding cost throughout the period [0, T]. In this model tr

and T are taken as decision variables. Numerical examples are provided to illustrate the model and sensitivity

analysis of the optimal solutions for major parameters is also carried out. The purpose of this study is to make

the model more relevant and applicable in practice.

II.

NOTATIONS

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

Io(t) : Inventory level for the owned warehouse (OW) at time t.

w : The capacity of the owned warehouse.

D(t) : Demand rate.

(t) : Rate of deterioration per unit time.

R : Inflation rate.

A : Ordering cost per order during the cycle period.

Cd : Deterioration cost per unit per unit time.

Ch : Inventory holding cost per unit per unit time.

Q : Order quantity in one cycle.

k : Purchase cost per unit.

p : Selling price per unit.

Ie : Interest earned per year

Ip : Interest charge per year.

M : Permissible period of delay in settling the accounts with the supplier

tr : time at which the inventory level reaches zero in RW in two warehouse system.

T : The length of cycle time.

TCi : Total cost per unit time in the ith case. (i = 1, 2, 3)

1.

2.

3.

4.

5.

6.

7.

8.

The demand rate of the product is D (t) = a + bt + ct2 (where a, b, c > 0).

Holding cost is a linear function of time and it is Ch = h+rt (h, r > 0) for both OW and RW

Shortages are not allowed.

Replenishment rate is infinite and instantaneous.

Repair or replacement of the deteriorated items does not take place during a given cycle.

OW has a fixed capacity W units and the RW has unlimited capacity.

First the units kept in RW are used and then of OW.

The inventory costs per unit in the RW are higher than those in the OW.

III.

IV.

ASSUMPTIONS

At time t = 0 the inventory level is S units. From these w units are kept in owned warehouse (OW) and rest in

the rented warehouse (RW). The units kept in rented warehouse (RW) are consumed first and then of owned

warehouse (OW). Due to the market demand and deterioration of the items, the inventory level decreases during

the period [0, tr] and the inventory in RW reaches to zero. Again with the same effects, the inventory level

decreases during the period [tr, T] and the inventory in OW will also become zero at t = T.

The pictorial presentation is shown in the Figure 1.

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The differential equations which describe the instantaneous state of inventory at time t over the period [0, T] are

given by

dIr t

dt

dI0 t

dt

dI0 (t)

dt

Ir t a bt ct

I0 t 0

I0 t a bt ct

(1)

(0 t t r )

(2)

(tr t T)

(3)

t tr

Under the boundary conditions Ir(tr) = 0, Io(0) = w, and Io(T) = 0, solutions of equations (1) to (3) are given by

Ir t a t r t b a

I0 t w e

2

r

c b

3

r

4

r

a t r t t b

2

r

3

r

(4)

(5)

I0 t a T t b a

t

2

c b

V.

t

4

a T t t b

t

2

(6)

COSTS COMPONENTS

The total cost per replenishment cycle consists of the following cost components.

1) Ordering Cost

The operating cost (OC) over the period [0, T] is

OC = A

(7)

2) Deterioration Cost

The deterioration cost (DC) over the period [0, T] is

t

Rt

D C C d Ir ( t ) e

dt

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tr

I0 ( t ) e

0

T

Rt

d t I 0 ( t ) e

0

Rt

dt

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4 R 4 6 at 6 a t 2 6 b t 2 4 b t 3 4 ct 3 3ct 4 6 R 3 6 a 6 at 3b t 2 2 ct 3

r

r

r

r

r

r

r

r

r

24 R 2 a b 12 R b 2c 24c

Rtr

3R 3 a bt ct 2 2 R 2 a b bt 2ct ct 2 R b 2c 2ct 2c

1

2

e

r

r

r

r

r

r

5

4

2

2

3

3

4

3

2

3

12R

4 R 6 a T 6 b T 4 b T 4 cT 3c T 1 2 T 6 R 6 a 6 aT 3b T 2 cT

2

DC Cd

24 R a b 12 R b 2c 24c

tr R

we

1

(8)

3) Inventory Holding Cost

The inventory holding cost (IHC) over the period [0, t r] is

IHC = Holding cost during the cycle period T in RW [HC(RW)]

+ Holding cost during the cycle period T in RW [HC(OW)]

where,

tr

H C (R W )

( h rt ) I r ( t ) e

Rt

(9)

dt

h 4 8 R 4 a b t ct 2 3 6 R 3 a b b t 2 ct ct 2 2 4 R 2 b 2 c 2 ct 2 4 c R

r

r

r

r

r

r

R tr

4

2

3

3

2

2

3

e

48R

at r bt r ct r 36 R

2a at r 3bt r b t r 4ct r ct r

2

2

2

4

R

3

a

3

b

4

b

t

8

c

t

5

c

t

2

4

R

2

b

4

c

5

c

t

1

2

0

c

r

r

r

r

5

2

2

3

3

4

5 R 1 2 at r 6 at r 6 b t r 4 b t r 4 ct r 3c t r

4

3

2

3

2

6a 6at r 2ct r 3b t r 36 R a b 24 R b 2c 24cR

8R

4 R 4 1 2 at 6 at 2 6 b t 2 4 b t 3 4 ct 3 3c t 4

r

r

r

r

r

r

r R 3 7 2 R 3a 2 4 R 3c t 3 3 6 R 3b t 2 7 2 R 3a t

r

r

r

H C (R W )

12R

(10)

tr

H C (O W )

( h rt ) I

0

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T

0

(t) e

Rt

dt

( h rt ) I

(t) e

Rt

dt

tr

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1

(R )2

R tr

e

6

12R

RT

e

6

12R

2016

2

3

2

2 4 c R R 2 4 b 4 8 c ( 1 t r ) R 3 6 a 3 6 b ( 1 t r ) 3 6 c ( 2 t r t r )

4

2

2

2

3

3

R 4 8 a ( 1 t r T ) 2 4 b ( 2 t r t r T ) 1 6 c ( 3 t r t r T )

2

2

2

3

2

2

3 0 a ( 2 t r t r 2 T 2 T t r T ) 1 0 b ( 3 t r t r 3T 3T t r

5

R

3

3

4

3

3

4

2 T ) 5 c ( 4 t r t r 4 T 4 T t r 3 T )

R 4 8 b 2 4 c( 4 5 t r 5T ) R 2 7 2 a 2 4 b ( 3 4 t r) 2 4 c( 8 t r 5 t r2)

3

2

2

2

3

3

R 3 6 a ( 2 3t 2 T ) 3 6 b ( 3 t 2 t T ) 1 2 c( 1 2 t 5t 2 T )

r

r

r

r

r

2

2

2

3

2

2

3

2 4 a ( 4 t r 3t r 2 T 4 T t r T ) 8 b ( 9 t r 4 t r 3T 6 T t r 2 T )

4

r R

3

4

3

3

4

4 c ( 1 6 t r 5 t r 4 T 8 T t r 3 T )

2

3

2

2

30a ( 2 t r t r 2T t r 2T t r T t r)

5

3

4

2

2

2

3

4

5

3

3

2

R 1 0 b ( 3 t r t r 3T t r 3T t r 2 T t r ) 5c( 4 t r t r 4 T t r 4 T t r

3T t r )

1 2 0 c

2 4 c R 2 4 R 2 b 2 c (1 T )

3

2

4

2

3 6 R a b (1 T ) c ( 2 T T ) 4 8 R ( a b T c T )

2 4 R ( 2 b 4 c ) 2 4 R 2 3 a b ( 3 4 T ) c (8 T 5 T 2 )

3

2

3

2

r 3 6 R a ( 2 T ) b ( 3 T T ) c ( T 4 c T )

4

2

3

4

8

R

(

a

T

T

b

T

c

)

1

2

0

c

e t r ( R ) r ( R t t 1) h ( R ) r h ( R ) w

r

r

(11)

4) Interest Earned: There are two cases

Case 1: (M T)

In this case, interest earned is:

M

IE 1 p I e

(a b t ct

)t e

Rt

dt

IE 1

p Ie RM

e

4

R

2 R b 3M c 2 R 2 a 2 M b 3M 2c

2 R b 2 R 2a 6c

3R 3 M a M 2 b M 3c 6 c

(12)

Case 2: (M > T)

In this case, interest earned is:

T

IE 2 p I e [ ( a b t c t ) t e

2

Rt

d t ( a b T c T ) T ( M T )]

2

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1 RT

2 R b 3c T 2 R 2 a 2 b T 3c T 2 3 R 3 a T b T 2 c T 3 6 c 2 a R 2 2 b R 6 c}

4 e

IE 2 p I e R

(a b T c T 2 )T ( M T )

2016

(13)

5) Interest Payable: There are three cases described in figure-1

Case 1: (M tr T)

In this case, annual interest payable is:

tr

Rt

IP1 k I p I r ( t ) e

dt

M

tr

I0 (t) e

Rt

dt

tr

I0 (t) e

Rt

dt

1 2 R b 2 c ( 1 M ) 2 4 R 2 a b ( 1 M ) c ( M 2 2 M )

6 R 3 6 a ( 1 t M ) 3 b ( t 2 2 M ) 2 c ( t 3 3 M 2 M 3 )

r

r

r

24a 2 t t 2 2 M 2 M t M 2

r

r

r

e RM

R 4 2 b 1 2 t 2 8 t 3 1 2 M t 2 1 2 M 2 9 M 2 4 M 3

r

r

r

12R

3

4

3

3

4

4

c

4

t

4

M

4

M

2

4

c

r

r

r

1 2 R b 2 c (1 t ) 2 4 R 2 a b (1 t ) c ( 2 t t 2 )

r

r

r

r

R tr

3

2

3 6 R ( a b t r c t r ) 2 4 c

w e M (R ) e tr (R )

IP1 k I p

2

2

1 2 R b 2 c ( T 1) 2 4 R a b (1 T ) c ( 2 T T )

RT

3

2

3 6 R ( a b T c T )

2

2

1

1 2 R b 2 c ( 1 t r ) 2 4 R a b ( 1 t r ) c ( 2 t r t r )

5

12R

R tr

3

2

2

2

3

3

6 R 6 a ( 1 t r T ) 3 b ( 2 t r t r T ) 2 c ( 3 t r t r T )

2

2

2

3

2

2

3

6 a ( 2 t r t r 2 T 2 T t r T ) 2 b ( 3 t r t r 3T 3T t r 2 T )

4R

3

4

3

3

4

c( 4 t r t r 4 T 4 T t r 3T )

(14)

Case 2: (tr M T)

In this case, interest payable is:

T

IP 2 k I p

(t) e

Rt

dt

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e RT 12 R b 2c 1 T 24 R 2 a b 1 T c 2T T 2 36 R 3 bT cT 2 1

1 2 R b 2 c 1 M 2 4 R 2 a b 1 M c 2 M M 2

k Ip

IP 2

5

1 2 R e RM 6 R 3 6 a 1 T M 3 b T 2 2 M M 2 2 c T 3 3 M 2 M 3

2

2

2

2

3

2

6 a 2 T T 2 M 2 M T M 2 b 3T 3M T 2 T 3M M 3

4R 4

c 4 T 3 3T 4 4 M 3 M 4 4 M T 3

2 4 c

24c

(1 5 )

Case 3: (M T)

In this case, no interest charges are paid for the item and so

IP3 = 0

(16)

Substituting values from equations (7) to (11) and equations (12) to (16) in equations (17) to (19), the retailers

total cost during a cycle in three cases will be as under:

T C1

TC2

TC3

1

T

1

T

1

T

[ A H C ( O W ) H C ( R W ) D C IP1 IE 1 ]

(17)

[ A H C ( O W ) H C ( R W ) D C IP2 IE 1 ]

(18)

[ A H C ( O W ) H C ( R W ) D C IP3 IE 2 ]

(19)

Our objective is to determine the optimum values tr* and T* of tr and T respectively so that TCi is minimum.

Note that tr* and T* can be obtained by solving the equations

T C i

tr

and

T C i

T

(i = 1, 2, 3)

2

2

2

T C i T C i T C i

t r T t r T

*

*

t r t r ,T T

TCi

2

t r

*

*

t r t r ,T T

(20)

(21)

The optimum solution of the equations (20) can be obtained by using appropriate software. The above

developed model is illustrated by the means of the following numerical example.

Numerical Example 1

To illustrate the proposed model, an inventory system with the following hypothetical values is considered. By

taking A = 150, w = 100, a = 8, b = 0.5, c = 0.2, k = 10, p = 15, = 0.2, h = 1, r = 0.5, R = 0.06, M = 10, Cd = 4,

Ip = 0.15 and Ie = 0.12 (with appropriate units). The optimal values of tr and T are tr* = 13.71456792,

T* = 22.25988127 units and the optimal total cost per unit time TC = 3.346889173 units.

Numerical Example 2

By taking A = 150, w = 100, a = 8, b = 0.5, c = 0.2, k = 10, p = 15, = 0.2, h = 1, r = 0.5, R = 0.06, M = 16, Cd

= 4, Ip = 0.15 and Ie = 0.12 (with appropriate units). The optimal values of tr and T are tr* = 13.51613807,

T* = 22.37726544 units and the optimal total cost per unit time TC = 3.345597534 units.

Numerical Example 3

By taking A = 150, w = 100, a = 8, b = 0.5, c = 0.2, k = 10, p = 15, = 0.2, h = 1, r = 0.5, R = 0.06, M = 25, Cd

= 4, Ip = 0.15 and Ie = 0.02 (with appropriate units). The optimal values of tr and T are tr* = 13.18456160,

T* = 21.82708029 units and the optimal total cost per unit time TC = 3.354324259 units.

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2016

SENSITIVITY ANALYSIS

Sensitivity analysis depicts the extent to which the optimal solution of the model is affected by the

changes in its input parameter values. Here, we study the sensitivity for total cost per time unit TC with respect

to the changes in the values of the parameters A, w, a, b, k, p, , h, r, R, M, Cd, Ip and Ie.

The sensitivity analysis is performed by considering variation in each one of the above parameters keeping all

other remaining parameters as fixed.

Table 1: Partial Sensitivity Analysis Based Numerical Example 1

Parameter

Cd

Ip

Ie

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%

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

tr

13.71447314

13.71452053

13.71461530

13.71466269

13.71431025

13.71443908

13.71467456

13.71482346

13.84152478

13.76345536

13.65129742

13.58816752

13.8042342

13.7378448

13.65365824

13.59333966

13.40809897

13.57726226

13.74245234

13.93224244

13.67366618

13.69435261

13.72634634

13.75234245

13.69744424

13.70601765

13.72309523

13.74735242

13.83833426

13.77588804

13.70534424

13.62068895

13.20357242

13.53183825

13.87425830

14.01504787

13.58566195

13.65213269

13.77312758

13.89424234

13.89752709

13.80659136

13.62292868

13.51435235

14.31247578

14.00173743

13.44791651

13.19928734

13.67366619

13.69435261

13.71559399

13.74230052

13.69744424

13.70601764

13.72309523

13.74455743

T

22.25972159

22.25980143

22.25996110

22.26004094

22.25885504

22.25936817

22.25995064

22.26063452

22.41111398

22.22684594

22.18409989

22.10821091

22.42534248

22.25457424

22.16879359

22.07839783

21.84679176

22.07546066

22.24245492

22.46575234

22.27401292

22.26692751

22.25354735

22.23045532

22.23103278

22.24547596

22.27424896

22.30465234

22.38734515

22.32329591

22.25552357

22.17354374

22.59345423

21.99245885

22.49184150

22.69505830

22.14684808

22.20358478

22.31551645

22.38093463

22.42210880

22.34812012

22.16236931

22.02543452

23.09785921

22.66127789

21.88887087

21.54435448

22.27401293

22.26692751

22.25534246

22.23734623

22.23103278

22.24547596

22.27424897

22.29057395

TC

3.346912472

3.346900821

3.346877526

3.346865879

3.347103806

3.346996485

3.346673450

3.346262374

3.343914723

3.344374543

3.348403083

3.349934358

3.336424245

3.346352560

3.356457972

3.366016024

3.374305795

3.359071177

3.327533453

3.289724248

3.346956312

3.346918734

3.346874345

3.346844245

3.347317011

3.347104047

3.346672374

3.344693510

3.342301127

3.344583519

3.346834535

3.349345345

3.327351645

3.338248686

3.354473847

3.361185927

3.347400392

3.347388352

3.345980907

3.343414543

3.151146989

3.264790826

3.407779167

3.553623423

3.390785280

3.367959896

3.327316573

3.309038613

3.346956309

3.346918732

3.346876232

3.346834321

3.347317012

3.347104047

3.346672377

3.346042343

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Parameter

Cd

Ip

Ie

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%

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

tr

13.51604909

13.51609358

13.51618256

13.51622705

13.51591199

13.51602503

13.51625110

13.51636414

13.64333127

13.57965806

13.45277320

13.38956532

13.63481162

13.57516715

13.45771684

13.39989606

13.21581454

13.38150471

13.62768352

13.72160264

13.52523031

13.52064253

13.51171465

13.50737009

13.48614532

13.50117694

13.53102955

13.54585219

13.63360874

13.57429871

13.45908327

13.40309302

13.09635691

13.32131908

13.68655241

13.83692044

13.28075404

13.40434365

13.61670836

13.70665010

13.7357502

13.60291751

13.42959475

13.34412799

13.79534277

13.65323617

13.38374436

13.30585885

13.52523031

13.52064253

13.51171465

13.50737009

13.48614532

13.50117694

13.53102956

13.54585219

T

22.37711758

22.37719151

22.37733936

22.37741330

22.37631039

22.37678794

22.37774291

22.37822034

22.52035345

22.44885384

22.30559047

22.23383113

22.54865775

22.46261813

22.29259521

22.20860292

21.99050041

22.20451234

22.51962059

22.63894021

22.39237401

22.38475036

22.36991547

22.36269679

22.32743475

22.35240706

22.40201124

22.42664574

22.49599813

22.43635440

22.31871718

22.26069621

21.86323698

22.13846509

22.58653786

22.77152068

21.98653331

22.19159195

22.54444818

22.69408388

22.58242423

22.45823933

22.28682626

22.19014080

22.75459060

22.56236200

22.19884321

22.05758387

22.39237401

22.38475036

22.36991547

22.36269679

22.32743476

22.35240706

22.40201124

22.42664575

TC

3.345621306

3.345609420

3.345585645

3.345573756

3.345813273

3.345705399

3.345489679

3.345381840

3.342216825

3.343898291

3.347314233

3.349048078

3.326087512

3.335847649

3.355336689

3.365064684

3.373941719

3.358192800

3.335297864

3.326720367

3.345042694

3.345320005

3.345875258

3.346153170

3.347000083

3.346302662

3.344884651

3.344163978

3.340773135

3.343175195

3.348039373

3.350500007

3.326199607

3.336626683

3.353410265

3.360283803

3.342745114

3.344844285

3.345332544

3.344337937

3.123457239

3.262047752

3.407275777

3.454355134

3.367050204

3.356125211

3.335438851

3.315277583

3.345042693

3.345320005

3.345875258

3.346153170

3.347000084

3.346302664

3.344884652

3.344163979

Page 70

2016

Parameter

Cd

Ie

VII.

%

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

20

10

+ 10

+ 20

tr

13.18446186

13.18451173

13.18461148

13.18466134

13.18432625

13.18467927

13.18479693

13.18479693

13.31931477

13.24755683

13.11733530

13.05021083

13.31054574

13.24726480

13.12242898

13.06085992

12.86485735

13.04146032

13.20457248

13.40229561

13.22525283

13.20479079

13.16455998

13.14478079

13.30282615

13.24312262

13.12709971

13.07069582

12.68846444

12.95550184

13.38337921

13.55768506

13.05396416

13.11901453

13.25061016

13.31716504

13.34646353

13.25268542

13.11295366

13.03955684

13.46399819

13.32175500

13.05211161

12.92412517

13.22525283

13.20479079

13.16455998

13.14478079

T

21.82691502

21.82699765

21.82716293

21.82724556

21.82603960

21.82760057

21.82812078

21.82812078

21.98110765

21.90558324

21.74978254

21.67229643

22.01073005

21.91859734

21.73617509

21.64587791

21.40993104

21.64109189

21.90587584

22.10781077

21.89451611

21.86060235

21.79394096

21.76117570

21.94904273

21.88778028

21.76692854

21.70731147

21.18106899

21.52931617

22.08494842

22.31066367

21.61080343

21.71850074

21.93655146

22.04692377

22.79342342

21.88025799

21.75863725

21.67944485

22.20643506

22.01316892

21.64771033

21.47464179

21.89451611

21.86060235

21.79394096

21.76117570

TC

3.354349092

3.354336674

3.354311843

3.354299426

3.354549367

3.354211723

3.354099199

3.354099198

3.350336381

3.352374535

3.356341913

3.358374908

3.333785661

3.344061525

3.364573350

3.374808297

3.384654039

3.367810636

3.334523534

3.334085768

3.353281835

3.353796635

3.354864818

3.355418422

3.349173527

3.351739476

3.356927110

3.359547320

3.338032570

3.346696600

3.361083736

3.367111872

3.336519252

3.345348582

3.363450676

3.372732410

3.195525833

3.270702764

3.415650030

3.462226585

3.375664255

3.364796485

3.344219928

3.334458659

3.353281835

3.353796633

3.354864818

3.355418421

GRAPHICAL PRESENTATION

Figure 2

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Page 71

2016

Figure 3

Figure 4

VIII.

CONCLUSIONS

From the Table 1, we observe that as the values of the parameters a, b, h, r and increase the average

total cost also increases and for the values of the parameters A, w, c, k, p, M, Cd, Ip and Ie the average total

cost decreases.

Table 2 shows that as the values of the parameters a, b, k, h, r, , Ip and M increase the average total cost

also increases and for the values of the parameters A, w, c, p, Cd and Ie the average total cost decreases.

From the Table 3, we note that as the values of the parameters a, b, p, h, r, M, and Ie increase the

average total cost also increases and for the values of the parameters A, w, c and Cd the average total cost

decreases.

From the Figure 2, we observe that the total cost per time unit is highly sensitive to changes in the values

of c, Cd, moderately sensitive to changes in the values of b, r and less sensitive to changes in the values of

A, w, a, k, p, h, M, Cd, Ip, Ie.

From the Figure 3 we note that the total cost per time unit is highly sensitive to changes in the values of

c, b, r, Cd, moderately sensitive to changes in the values of a, h and less sensitive to changes in the values of

A, w, p, M, k, Ip, Ie.

Figure 4 shows that the total cost per time unit is highly sensitive to changes in the values of b, c, M, r,

Cd, moderately sensitive to changes in the values of a, h and less sensitive to changes in the values of A, w,

p, Ie.

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Page 72

2016

REFERENCES

[1].

[2].

[3].

[4].

[5].

[6].

[7].

[8].

[9].

[10].

[11].

[12].

[13].

[14].

[15].

[16].

[17].

[18].

[19].

Aggarwal S. P., and Jaggi C. K., Ordering Policies of Deteriorating Items under Permissible Delay in Payments, Journal of

Operational Research Society, 1995, 46, 658662.

A.M.M. Jamal, B.R. Sarkar. and S. Wang, An ordering policy for deteriorating items with allowable shortages and permissible

delay in payment, Journal of Operational Research Society, 1997, 48, 826833.

Bhojak A. and Gothi U. B., Inventory Models for Ameliorating and Deteriorating Items with Time Dependent Demand and IHC.

International Journal of Management and Social Science Research Review, 2015, Vol. 1, Issue 2, 8598.

Chatterji, D. A., Gothi U. B. and Parmar K. C., An Integrated Inventory Model with Exponential Amelioration and Two

Parameter Weibull Deterioration, Journal of Statistics and Mathematical Engineering, MAT Journals, 2016, Vol. 2, No. 2.

Chung K. J., and Huang Y. F., The Optimal Cycle Time for EPQ Inventory Model Under Permissible Delay in Payments,

International Journal of Production Economics, 2003, 84, 307318.

Chung K. J., and Liao J. J., Lot-Sizing Decisions Under Trade Credit Depending on the Ordering Quantity, Computers and

Operations Research, 2004, 31, 909928.

Chung K. J., and Huang T. S., The Optimal Retailers Ordering Policies for Deteriorating Items with Limited Storage Capacity

Under Trade Credit Financing, International Journal of Production Economics, 2007, 106, 127145.

C.T. Chang, J.T. Teng and S.K. Goyal, Inventory lot sizing models under trade credits, Asia Pacific Journal Operational

Research, 2008, 25, 89112.

Goyal S. K., Economic Order Quantity under Conditions of Permissible Delay in Payments, Journal of the Operational Research

Society, 1985, 36, 335338.

Hartley V. R., Operations Research A Managerial Emphasis, 1976, Goodyear, Santa Monica.

Huang K. N., and Liao J. J., A Simple Method to Locate the Optimal Solution for Exponentially Deteriorating Items Under Trade

Credit Financing, Computers and Mathematics with Applications, 2008, 56, 965977.

K.V.S. Sarma, A deterministic inventory model for deteriorating items with two storage facilities; European Journal of

Operational Research, 1987, 29, 7072.

Lee C. C., and Hsu S. L., A Two-Warehouse Production Model for Deteriorating Inventory Items with Time-Dependent

Demands, European Journal of Operational Research, 2009, 194, 700710.

Liao J. J., On an EPQ Model for Deteriorating Items Under Permissible Delay in Payments, Applied Mathematical Modelling,

2007, 31, 393403.

Liao J. J., An Inventory Control System Under Deferrable Delivery Conditions, Mathematical and Computer Modelling, 2008,

47, 247258.

Parmar, K., Gothi U. B., Order level inventory model for deteriorating items under time varying demand condition, Sankhaya

Vignan, 2015, NSV 11, No. 1, 2029.

Parekh R. U. and Patel R. D., Deteriorating items inventory models for two warehouses with linear demand, time varying holding

cost under inflation and permissible delay in payments, International Journal of Mathematics and Statistics Invention, 2014, Vol.

2, Issue 5, pp. 39-48.

Rong M., Mahapatra N. K., and Maiti M., A Two Warehouse Inventory Model for a Deteriorating Item with Partially/Fully

Backlogged Shortage and Fuzzy Lead Time, European Journal of Operational Research, 2008, 189, 5975.

Teng J. T., Change C. T., and Goyal S. K., Optimal Pricing and Ordering Policy Under Permissible Delay in Payments,

International Journal of Production Economic, 2005, 97, 121129.

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