INVENTORY MODEL WITH SALVAGE VALUE FOR WEIBULL DETERIORATION RATE UNDER CREDIT POLICY AND PRESERVATION OF NON-INSTANTANEOUS DETERIORATION

This study introduces an inventory model that incorporates the effects of preservation technology, which plays a crucial role in significantly lowering the rate of deterioration. The deterioration rate is assumed to follow a two-parameter Weibull distribution and varies over time. The model assumes a quadratic demand pattern, where demand is a non-linear function of time and captures more realistic market behaviours, such as initial growth followed by decline. Salvage value for items that have deteriorated is also allowed. Salvage cost is considered not only for unsold inventory, but also for partially deteriorated products and helps in reducing overall loss. In addition, trade credit policy is also considered for the retailer, which is a common financial practice in supply chain of business. To find the optimal inventory policy, the total cost is minimized through analytical methods. Numerical examples and graphical illustrations are included to demonstrate the practicality and robustness of the model.