Cost Minimization Problem for Deteriorating Item With Stock Level Dependent Demand and Controllable Deterioration Under Trade Credit and Partial Backlogging

This paper studied cost minimization problem for deteriorating item where demand is stock level dependent, deterioration is controllable, vendor can offer trade credit and shortages are partially backlogged. We derived the objective function which is the total average cost function and solved the optimization problem by using optimization problem solver in MatLab. From the numerical examples and sensitivity analysis, we found that the optimal total average cost and the optimal ordered quantity are sensitive to the reduced deteriorating rate and initial demand parameters.