Back order inventory model for deteriorating items

Abstract

This paper considers an inventory situation where the dealer purchases quantities of item that are offered for sales during a short time interval with shortages permitted. We shall be concerned with finding optimal replenishment schedule for an inventory system in which items deteriorate over time. Computational results are based on the data set from a perishable product distributor whose aim is to minimize its inventory build-up and to maximize demand satisfaction. We provide a frame work on current practices that will help manage the situation with a fraction of the demand backlogged.