Deterministic inventory systems for deteriorating items with inventory level-dependent demand rate and shortages (Q804462)

The inventory process i(\(\cdot)\) for the replenishment cycle [0,T] is described by the following differential equation: \(di(t)/dt=-a-i(t)b\), \(0\leq t\leq \mu\); \(di(t)/dt=-a-i(t)b-qi(t)\), \(\mu <t\leq t_ 1\); \(di(t)/dt=-a\), \(t_ 1<t\leq T\), where \(a>0\), \(0<b<1\), \(0<b+q<1\), \(0<q<1\), \(i(0)=S>0\), \(\mu >0\), \(t_ 1=\inf \{t>\mu\); \(i(t)=0\}\). An average profit per unit time in the replenishment cycle is assumed. The paper deals with both infinite and finite time-horizon problems. In the infinite time-horizon the pair (S,T) is treated as a decision variable. In the finite time-horizon the pair (S,m), where m denotes the number of replenishment cycles is considered as a decision variable. In both cases the optimal pairs are determined.