A CASH FLOW EOQ INVENTORY MODEL FOR NON-DETERIORATING ITEMS WITH CONSTANT DEMAND

Abstract

This study presents an inventory model to determine an optimal ordering policy for non-deteriorating items and time independent demand rate with delay in payments permitted by the supplier under inflation and time discounting, and the rate is assumed to be constant.This study determines the best cycle period and optimal payment period for items so that the annual total relevant cost is minimized. The main purpose of this study is to investigate the optimal (minimum) total present value of the costs over the time horizon H for both cases where the demand is fixed (constant) at any time. This study work is limited to only non-deteriorating goods with constant demand and with a permissible delay in payment.Numerical example and sensitivity analysis are given to evince the applicability of the model.