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Preservation technology investment for deteriorating inventory

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  • Hsu, P.H.
  • Wee, H.M.
  • Teng, H.M.

Abstract

The objective of this study is to develop a deteriorating inventory policy when the retailer invests on the preservation technology to reduce the rate of product deterioration. A solution procedure is presented to determine an optimal replenishment cycle, shortage period, order quantity and preservation technology cost such that the total profit per unit time is maximized. A numerical example and sensitivity analysis are presented to illustrate the model.

Suggested Citation

  • Hsu, P.H. & Wee, H.M. & Teng, H.M., 2010. "Preservation technology investment for deteriorating inventory," International Journal of Production Economics, Elsevier, vol. 124(2), pages 388-394, April.
    • Handle: RePEc:eee:proeco:v:124:y:2010:i:2:p:388-394
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