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Title: Inspection policy for inventory system with deteriorating products
Authors: Tai, AH
Xie, Y
Ching, WK
Keywords: Back-ordering
Deteriorating items
Dynamic programming
Inspecting policy
Ordering quantity
Replenishment time
Issue Date: 2016
Publisher: Elsevier
Source: International journal of production economics, 2016, v. 173, p. 22-29 How to cite?
Journal: International journal of production economics 
Abstract: Typical inventory models usually focus on screening out the deteriorating items, not much attention is paid to the situation that a proportion of deteriorated items are sold to consumers together with serviceable items during a replenishment cycle. This paper first presents a model to formulate the process of such kind of mixed sales. A simple closed-form solution is obtained for maximizing the net profit per unit time under the assumption of small deterioration rate. The effect of shortage back-ordering is then considered and closed-form solutions of optimal ordering quantity and replenishment time are obtained under similar assumption. We further study the effect of inspection policies on optimal decisions for a deteriorating inventory system. A dynamic programming approach is proposed for solving the optimal policy. Numerical examples are then provided to demonstrate our conclusions and results.
ISSN: 0925-5273
DOI: 10.1016/j.ijpe.2015.11.018
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