Maximum-Profit Inventory Model with Generalized Deterioration Rate

Abstract

We developed a maximum profit inventory model with a generalized deterioration rate where the selling rate is dependent on the inventory level that is an extension of two published papers. A complete solution structure is provided to decide the optimal solution with reasonable conditions supported by numerical examples, and then we prove that the optimal solution is independent of the demand pattern. Numerical examples are provided to illustrate our findings. In a previously published paper, three examples had symmetric conditions to decide the local maximum solution. Our approach provides a reasonable explanation for this symmetric phenomenon. Our findings will help researchers develop new inventory models in the future.

Keywords

• stock-dependent selling rate
• maximum profit
• inventory model