Abstract

As the long arm of the grinding, deep financial crisis continues to haunt the global economy and the assumption that the goods in inventory always preserve their physical characteristic are not true in general, the effects of inflation and deterioration cannot be oblivious to an inventory system. In today’s market structure, partial backlogged shortages are a more practical important assumption for better business performance. Therefore, bearing in mind these facts, we have developed an order level inventory system for deterioration with shortages and demand rate as a ramp type function of time by exploring two different cases when the demand rate is stabilized after and before the production stopping time end unit production cost is inversely proportional to the demand rate. Optimal costs are determined by two different cases incorporating the effect of inflation.