ECONOMIC ORDER QUANTITY (EOQ) FOR ITEMS EXHIBITING DELAY IN DETERIORATION WITH PRICE, STOCK, AND RELIABILITY DEMAND UNDER PARTIAL BACKLOGGING

Abstract

The study explored an advanced EOQ model tailored for items that delay deterioration, such as perishable goods. This model incorporates price, stock level, and reliability as variables affecting demand to optimize profit per unit time under partial backlogging conditions. Differential equations that capture inventory dynamics across stages of no deterioration, active deterioration, and shortage are presented. Numerical simulations using Excel and Maple validate the model, revealing that higher stock-dependent consumption parameters and reliability increase demand and profitability. Results indicate that deterioration negatively impacts profit by reducing product quality, while longer replenishment cycles decrease profitability due to increased spoilage. Enhanced backordering boosts profit by reducing holding costs. This study highlights the importance of integrating price, stock, and reliability in EOQ models for strategic inventory management, balancing costs to maximize operational gains.