An EOQ model for a deteriorating item with non-linear demand under inflation and a trade credit policy

Abstract

This paper develops an infinite time-horizon deterministic economic order quantity (EOQ) inventory model with deterioration based on discounted cash flows (DCF) approach where demand rate is assumed to be non-linear over time. The effects of inflation and time-value of money are also taken into account under a trade-credit policy of type "α/T1 net T". The results are illustrated with a numerical example. Sensitivity analysis of the optimal solution with respect to the parameters of the system is carried out.

Keywords

• infinite-time horizon
• deterioration
• non-linear demand
• inflation
• trade-credit policy