Inventory Management Model for Deteriorating and Ameliorating items with Cubic Demand under Salvage Value and Permissible Delay in Payments

It is seen widely that the demand of items like fruits, flowers, green vegetables, dairy products etc is very high in our daily life and at the same time it is also decreased owing to spoilage or decay as these are kept in farms, in flower shops, in supermarkets or in cold storages. So we cannot ignore the effect both of amelioration and deterioration in the inventory management system. The assumption of constant demand rate may not be always appropriate for many inventory goods like milk, vegetables etc., the age of inventory has negative impact on demand due to loss of consumer confidence on quality of such products. Here demand rate is considered as a cubic function of time and shortages are allowed which are fully backlogged. The model is solved with salvages value associated to the units deteriorating during the cycle. Moreover, collaborative business policy in an inventory management system between the venders and the customers is most important. There are many inventory situations where the buyer is allowed a permissible period to pay back the cost of goods bought without paying any interest. This permissible delay in payment is a win–win strategy for sharing profit in the collaborative system. However, the purchaser can earn interest on the sales of the inventory during the payment period.

The present paper deals with an inventory model assuming time-varying deteriorating items and two-parameter Weibull distributed ameliorating items with cubic demand under salvage allowing permissible delay in payments. Finally the model is illustrated with the help of numerical examples and some particular cases are illustrated numerically.