Advances in Operations Research
Volume 2012 (2012), Article ID 321471, 17 pages
http://dx.doi.org/10.1155/2012/321471
Research Article

An Inventory Model with Time-Dependent Demand and Limited Storage Facility under Inflation

Neeraj Kumar,1 S. R. Singh,2 and Rachna Kumari3

1Department of Applied Sciences and Humanities, IIMT Engineering College, Meerut 250001, India
2Department of Mathematics, D. N (P.G) College, Meerut 250001, India
3Department of Mathematics, Meerut College, Meerut 250001, India

Received 16 March 2012; Revised 6 September 2012; Accepted 7 September 2012

Academic Editor: Lars Mönch

Copyright © 2012 Neeraj Kumar et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

The main objective of this paper is to develop a two-warehouse inventory model with partial backordering and Weibull distribution deterioration. We consider inflation and apply the discounted cash flow in problem analysis. The discounted cash flow (DCF) and optimization framework are presented to derive the optimal replenishment policy that minimizes the total present value cost per unit time. When only rented or own warehouse model is considered, the present value of the total relevant cost is higher than the case when two-warehouse is considered. The results have been validated with the help of a numerical example. Sensitivity analysis with respect to various parameters is also performed. From the sensitivity analysis, we show that the total cost of the system is influenced by the deterioration rate, the inflation rate, and the backordering ratio.