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A Production Inventory Model in a Random Planning Horizon Incorporating Learning Effects on Inventory Costs Under Inflation and Time Value of Money via Genetic Algorithm

Arindam Roy, Manas Kumar Maiti

Abstract


A production inventory model for a new product is developed incorporating inflation and time value of money. It is assumed that lifetime of the product is random in nature and follows exponential distribution with a known mean. So planning horizon of the model is random in nature. Here learning effect on production and set-up cost is incorporated. Model is formulated to maximize the expected profit from the whole plan-ning horizon and is solved using Genetic Algorithm (GA). The model is illustrated with some numerical data. Sensitivity analysis on expected profit function is also presented.


Keywords


Learning Effect, inflation, time value of money, random planning horizon, genetic algorithm

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References


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