Optimum Replenishment Policies for Time Decaying Items with Selling Price and Stock Dependent Demand

In the classical inventory it is assumed that all the costs associated with the inventory system remains constant over time. Since most decision makers think that the inflation does not have significant influence on the inventory policy and most of the inventory models developed so far does not include inflation and time value of money as parameters of the system. But due to large scale of inflation the monetary situation in almost of the countries has changed to an extent during the last thirty years. Nowadays inflation has become a permanent feature in the inventory system. Inflation enters in the picture of inventory only because it may have an impact on the present value of the future inventory cost. Thus the inflation plays a vital role in the inventory system and production management though the decision makers may face difficulties in arriving at answers related to decision-making. In this paper an inventory model for deteriorating items and the effects of inflation and lifetime have been developed. An increase in the deterioration factors poses a decreases in optimal time as well as the selling price of the commodity. The backlogging parameter is found to be slightly increased the optimal time and the optimal selling price. But an increase in this parameter adversely affects the net profit of our system.