Flexible inventory system of imperfect production under deterioration and inflation

Abstract

This study emphasizes the development of a flexible inventory system considering rework requirements on imperfect and defective items. This work has considered defective items could be sold at a lower price in the market as compared to the perfect items. The developed model has considered Weibull deterioration and inflation to balance the same amount in the future due to its potential earning capacity. And demand's function depends on price as well as inventory level because a large pile of goods and their price strategy attracts more customers to generate higher demand. The work also supports managerial decision-making by focusing on the volume flexibility system for smooth production runs. The mathematical formulation of the developed inventory system tries to optimize the inventory cost function under a realistic scenario. A solution procedure has been illustrated and assisted with a numerical example. Later, a validation test is also performed to check the robustness of the proposed mathematical model. The findings of the study will support policymakers, strategists, and firms to implement flexible inventory systems under realistic conditions.

Keywords

• weibull deterioration rate
• stock and price-dependent demand rate
• flexible production
• inflation