An EPQ Model for Delayed Deteriorating Items with Two-Phase Production Period, Exponential Demand Rate and Linear...

Area of Science:

• Operations Research
• Inventory Management
• Supply Chain Optimization

Background:

• The Covid-19 pandemic highlighted vulnerabilities in production and supply chains, particularly for deteriorating items.
• Traditional inventory models often fail to account for delayed deterioration and complex production cycles.

Purpose of the Study:

• To develop an economic production quantity (EPQ) model for delayed deteriorating items with two-phase production periods.
• To address production challenges exacerbated by global events like the Covid-19 pandemic.
• To determine optimal production quantities and replenishment cycles to minimize total variable costs.

Main Methods:

• A novel EPQ model incorporating delayed deterioration, two-phase production, exponential demand, and time-dependent holding costs.
• Mathematical analysis using differential calculus to establish optimality conditions.
• Numerical experimentation to validate the model and analyze parameter impacts.

Main Results:

• A higher carrying charge was found to decrease production quantity.
• A longer demanding period was shown to reduce the total variable cost.
• The model provides a framework for optimizing production and inventory for imperfect industries.

Conclusions:

• The developed EPQ model offers a robust solution for managing delayed deteriorating items in dynamic environments.
• Sensitivity analysis provides valuable managerial insights for cost reduction and production planning.
• The study identifies future research avenues in inventory and production optimization.