Inventory Model for Deteriorating Pharmaceutical Items with Linear Demand Rate

Abstract

Good management of goods is needed so that the inventory activities of a business can run smoothly as the part of supply chain management which aims to monitor the flow of stock of goods from the purchasing process, and storage to the point of sale. In terms of inventory or supplies of pharmaceutical goods, conditions such as shortages or stockouts must also be considered which are a matter of control, management, and security. In this study, an inventory model is formulated with deterioration or damage to pharmaceutical goods that occurs due to the length of time when the goods are stored with a linear demand level. In the optimal solution, the inventory time occurs when it reaches the zero point (t1) of 0.34 and the cycle length (T1) of 0.83 with an average minimum total cost (TC) of $445.25 per cycle which is completed by WolframAlpha software. Sensitivity analysis changes the value results in the value of (TC) which that increases for all parameters. In increasing the linear function variables (a and b), it produces t1 and T1 stable values. An increase in the cost of each item damage (DC) and constant damage rate (theta) produces a t1 stable value, but the value of T1 increases. The increase in storage costs (h) results in a decrease in the value of t1 and T1. An increase in the cost of shortages (s) results in an increase in the value of t1 and a decrease in the value of T1.

Keywords

• inventory model
• pharmaceutical goods
• deteriorating
• linear demand level
• complete backlogging