EOQ Model for Time-Deteriorating Items Using Penalty cost
In inventory, the utility of the deteriorating items decreases with time. The degree of deterioration of product utility can be treated as penalty cost in the inventory replenishment system. In this paper, we present EOQ model for those perishable products, which do not deteriorate for some period of time and after that time they continuously deteriorate with time and loose their importance. This loss can be incurred as penalty cost to the wholesaler / retailer. The prime focus of our paper is to develop the EOQ model for time-deteriorating items using penalty cost with finite and infinite production rate. For simplicity, linear and exponential penalty cost functions have been considered as a measurement of the utility of the product. The theoretical expressions are obtained for optimum inventory level and cycle time. All the theoretical developments are numerically justified.