Abstract

A PRODUCTION INVENTORY MODEL WITH LINEAR LEVEL PRODUCTION RATE, LINEAR LEVEL DEPENDENT DEMAND AND CONSTANT HOLDING COST

A. Atama Madaki1 and B. Sani

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In this paper, we develop a production inventory model in which both production rate and demand rate are linearly dependent on inventory. The model considers small amount of decay and production starts with a buffer stock reaching a desired level of inventory. After reaching the desired level, the inventory begins to deplete due to deterioration and demand. The objective of this paper is to find out the optimal inventory cost and optimal cycle length. The cost function has been shown to be convex and a numerical example is given to illustrate the model. Later, a sensitivity analysis is carried out to see the effect of parameters changes. Keywords: Production, Inventory, Deterioration items, Backlog, Holding Cost.

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