Abstract

The main purpose of this paper is to investigate the optimal replenishment policy under the learning effect and allowable shortages within the economic order quantity (EOQ) framework. We adopt a demand function which is ramp type pattern. The assumption that the goods in inventory always preserve their physical characteristics is unethical. Therefore another important factor is deterioration, as it may yield misleading results. The unit production cost is inversely proportional to the demand rate. Hence a mathematical model has been developed in the view of above scenario, in order to determine the optimal costs for two different cases, by minimizing the present worth of total costs. Finally, numerical examples are provided to illustrate the theoretical results and a sensitive analysis of the optimal solution has been performed to showcase the effect of various parameters.