Operational Research in Engineering Sciences

A Deteriorating Inventory Model under Overtime Production and Credit Policy for Stock- and Price Sensitive Demand Function

Nita H. Shah,
Department of Mathematics, Gujarat University, Ahmedabad-380009, Gujarat, India
Kavita Rabari,
Department of Mathematics, Gujarat University, Ahmedabad-380009, Gujarat, India
Ekta Patel ,
Department of Mathematics, Gujarat University, Ahmedabad-380009, Gujarat, India

Abstract

This paper develops an overtime production model for demand rate to be a function of price and stock-level. Companies manufacturing rate fluctuates with the change in stock-level and demand rate. To control the deterioration up to some extent, the system introduces preservation technology investment. The article permits a two-level credit policy for flexible financing. The model calculates feasible profit value under preservation technology investment, production period and selling price.  Conclusively, a sensitivity analysis related to different inventory parameters is performed to study the dependency of optimal values on parameters.

Keywords
Overtime production, Production period, Conservation investment time, Deterioration, Stock- and vending worth dependent time, Sensitivity.