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Establishment of an EOQ with Non-Increasing Demand for Two Credit Periods under Deterioration and Time Discounting
Objective: In this paper, we consider time dependent demand under constant deterioration. The main objective of this paper is to obtain optimal cycle time which minimizes the total relevant cost. Methods/Statistical Analysis: We know that every business refers to the input- out relation. If the firm expands output by employing more and more the variable input, it alters the proportion between fixed and variable inputs. In this study, the truncated Taylor’s series approximations are used for exponential terms to find closed form numerical solution. The optimal value of cycle time is obtained by differentiating cost function. Findings: We compared all results with the optimal solution we also show that the total relevant cost function in minimum. Mathematical models are established to validate the proposed model considering four different situations i.e. case (1) T ≥ M1 Case (2) T < M1. Case (3) T ≥ M2 and case (4) T < M2. Application/Improvements: Capital is the most essential element of production process. At present inflation plays a crucial role in each type of business transaction. Numerical examples are given for four different situations, those show that the validity of the model. Sensitive analysis is included for different parameters. Cost is a factor which is directly related to production cost analysis helps in achieving high quality production at low cost.
Credit Period, Deterioration, EOQ Model, Optimal, Time Discounting, Time Sensitive Demand
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