Joint inspection and inventory control for deteriorating items with random maximum lifetime

Allen H. Tai, Yue Xie, Wanhua He, Wai Ki Ching

Research output: Journal article publicationJournal articleAcademic researchpeer-review

13 Citations (Scopus)

Abstract

In this paper, we consider inventory control problems for deteriorating items. Six practical models are developed for an inventory system with deterioration rate depending on the maximum lifetime of items. Due to the physical nature of items, the maximum lifetime of items is assumed to be random over a time period. Items exceeding the maximum lifetime are regarded as scarp and no longer serviceable. Two replenishment policies: (i) quantity-based policy and (ii) time-based policy, and two inspection scenarios: (i) one inspection and (ii) continuous monitoring have been discussed in these models. Examples and sensitivity analysis are given for each model. The results indicate that it may be beneficial for the inventory holder to adopt the quantity-based policy and drop the plan of continuous monitoring if the cost of continuous monitoring is too high. Otherwise, performing continuous monitoring is able to increase the optimal long-run average profit. These results provide useful insights for inventory holder in making managerial decisions.

Original languageEnglish
Pages (from-to)144-162
Number of pages19
JournalInternational Journal of Production Economics
Volume207
DOIs
Publication statusPublished - Jan 2019

Keywords

  • Deteriorating items
  • Inspection policy
  • Inventory system
  • Random maximum lifetime
  • Replenishment policy

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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