In this paper, an EOQ inventory model is depleted not only by time varying demand but also by Weibull distribution deterioration, in which the inventory is permitted to start with shortages and end without shortages. A theory is developed to obtain the optimal solution of the problem; it is then illustrated with the aid of several numerical examples. | Yugoslav Journal of Operations Research 12 (2002), Number 1, 61-71 DETERMINISTIC INVENTORY INVENTORY MODEL FOR ITEMS WITH TIME VARYING DEMAND, WEIBULL DISTRIBUTION DISTRIBUTION DETERIORATION AND SHORTAGES SHORTAGES KUN-SHAN WU Department of Bussines Administration Tamkang University, Tamsui, Taipei, Taiwan kunshan@ Abstract: In this paper, an EOQ inventory model is depleted not only by time varying demand but also by Weibull distribution deterioration, in which the inventory is permitted to start with shortages and end without shortages. A theory is developed to obtain the optimal solution of the problem; it is then illustrated with the aid of several numerical examples. Moreover, we also assume that the holding cost is a continuous, non-negative and non-decreasing function of time in order to extend the EOQ model. Finally, sensitivity of the optimal solution to changes in the values of different system parameters is also studied. Keywords: Inventory, time-varying demand, Weibull distribution, shortage. 1. INTRODUCTION Deterioration is defined as decay, change or spoilage that prevents the items from being used for its original purpose. Foods, pharmaceuticals, chemicals, blood, drugs are some examples of such products. In many inventory systems, deterioration of goods in the form of a direct spoilage or gradual physical decay in the course of time is a realistic phenomenon and hence it should be considered in inventory modeling. Deteriorating inventory has been widely studied in recent years. Ghare and Schrader [9] were two of the earliest researchers to consider continuously decaying inventory for a constant demand. Shah and Jaiswal [21] presented an order-level inventory model for deteriorating items with a constant rate of deterioration. Aggarwal [1] developed an order-level inventory model by correcting and modifying the error in Shah and Jaiswal's [21] analysis in calculating the average inventory holding cost. Covert and Philip [4] used a .
