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
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.
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