Inventory Model for Perishable Items with Stock-level Dependent Demand Rate and Discretely Variable Holding Costs

In the traditional economic inventory models,there exists a common assumption that the holding cost is fixed and inflexible during every order cycle.In this paper,the holding cost per unit of the item per unit time is assumed to be an increasing function of the time spent in storage.Two variable holding cost step functions are considered: Retroactive cost increases and incremental holding cost increases.The inventory model with discretely variable holding costs for perishable items is developed by assuming that the stock-dependent demand rate is down to a given level of inventory,beyond which it is a constant,and variable ordering cost is considered.Moreover,the terminal condition of zero ending inventories is not imposed on the inventory.Furthermore,the paper provides a simple solution algorithm for finding the maximum total profit per unit time.