AN INVENTORY MODEL WITH POWER DEMAND PATTERN UNDER INFLATION

Abstract

In this paper we discuss the impact of inflation with power demand pattern where two parameters Weibull distribution for deterioration is considered and also a discounted-cash-flow (DCF) approach with progressive trade credit is adopted. We present an analytic formulation of the inventory problem and compare the three cases. The objective function to be optimized is considered as present value of all future cash-out-flows .The motivations, extensions and weaknesses of various previous models have been discussed in brief to bring pertinent information regarding model developments in the past two decades. Numerical example is presented to illustrate the model developed. The result shows that in case 1 and case 2 , we observe that when inflation rate increases, optimum cycle time, optimum procurement quantity and present value of total inventory cost per cycle time decrease and in case 3 when inflation rate increases the present value of total inventory cost per cycle also increases