• INVENTORY MODELS FOR DETERIORATING ITEMS WITH STOCK DEPENDENT PRODUCTION RATE AND WEIBULL DECAY

Abstract

In this paper a production inventory model for deteriorating items is developed and analyzed with the assumption that the production rate is dependent on stock on hand. It is further assumed that lifetime of the commodity is random and follows a three parameter Weibull distribution and demand rate is a function of both selling price and time. Using the differential equations the instantaneous state of inventory is derived. With suitable cost considerations the total cost function and profit rate function are obtained. By maximizing the profit rate function the optimal ordering policies are derived. Through numerical illustrations the sensitivity analysis is carried. It is observed that the demand rate parameters and stock dependent production rate parameters have significant influence on optimal production scheduling and profit rate.