ABSTRACT
The main motive of this research is to determine an optimal policy by which we can deal with the situation that a retailer should have enough stock to meet the customer's demands to prevent stockout and deterioration. This study shows the impact of partial backlogging and shortages on decaying items in an easy manner. In this model, demand is taken as linearly price- and stock-dependent. For the purposes of the model, deterioration is taken as constant. It is assumed also that there is no available replacement and repair for the deteriorated merchandise. Numerical result and sensitivity analyses are also given to validate the model. The proposed chapter is to determine the optimal production run time and total cost by developing the inventory model. To illustrate the theory, we have provided the mathematical formulation of the model.
