Production-Inventory System of Deteriorating Items with Inflation Induced Demand

This paper considers the impact of inflation on the EPQ model for deteriorating items subject to random machine breakdowns and fixed maintenance period. The demand rate is assumed to be a function of inflation and the demand increase due to inflation. The objective is to determine the optimal production uptime that minimizes the present value of expected total costs per unit time consisting of setup, corrective maintenance, inventory carrying, deterioration, and lost sales costs with consider inflation rate over a finite-planning horizon. With consideration complexity of model and using The Taylor series approximations to all exponential terms, finally a relation earned for approximate calculation the optimal production uptime. Also, the effects of inflation, deterioration, machine breakdowns etc. on the optimal production uptime the optimal are studied with the help of numerical example.