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Optimal Ordering Policy of Deteriorating Items with Mixed Cargo Transportation Over a Finite Planning Horizon

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Author(s): Hsi-Mei Hsu | Zi-Yin Chen

Journal: American Journal of Operations Research
ISSN 2160-8830

Volume: 02;
Issue: 01;
Start page: 106;
Date: 2012;
Original page

Keywords: Transportation Costs | Deteriorating Items | Inventory Management

ABSTRACT
In this paper, we propose a deteriorating items inventory model with constant demand and deterioration rates, and mixed cargo transportation modes. The transportation modes are full container load (FCL) and less than container load (LCL). Deteriorating items, such as specialty gases which are applied in semiconductor fabrication, deteriorate owing to environmental variation. Exact algorithms are proposed to determine the optimal inventory policies over a finite and an infinite planning horizon. Numerical examples are given to illustrate the proposed solution procedures. In addition, when the deterioration rate is large, the results of the proposed model perform better compared to the inventory model proposed by Rieksts and Ventura (2008).

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