Entropic order quantity (EnOQ) model for deteriorating items

Jaber et al. [M.Y. Jaber, R.Y. Nuwayhid, M.A. Rosen, Price-driven economic order systems from a thermodynamic point of view, Int. J. Prod. Res. 42 (24) (2004) 5167–5184] suggested that it might be possible to improve production systems performance by applying the first and second laws of thermodynamics to reduce system entropy (or disorder). They then used these laws to modify the economic order quantity (EOQ) model to derive an equivalent entropic order quantity (EnOQ). The results suggested that larger quantities should be ordered than is suggested by the classical EOQ model.This paper extends the work of Jaber et al. (2004) to consider items which are subject to deterioration. Such a situation increases entropy, and so intuitively one would expect deterioration to reduce the order quantity because smaller order quantities will be used up more quickly and are less likely to deteriorate. A mathematical model is developed that determines batch sizes for deteriorating items while minimising entropy. The numerical results obtained by using the model are then discussed.