The effect of preservation technology investment on a non-instantaneous deteriorating inventory model

Considering an inventory system with a non-instantaneous deteriorating item, our objective is to study the effect of preservation technology investment on inventory decisions. The generalized productivity of invested capital, deterioration and time-depend partial backlogging rates are used to model the inventory system. The basic results of fractional programming are employed to prove the uniqueness of the global maximum for each case. We also establish several structural properties on finding the optimal replenishment and preservation technology strategies. Further, we use a couple of numerical examples to illustrate the results and conclude the paper with suggestions for possible future researches.

► We discuss the joint problem where the replenishment policy and preservation technology cost are decision variables. ► We provide some results on finding the optimal replenishment and preservation technology strategies. ► We investigate the change of the optimal solution and the total profit per unit time from the sensitivity analysis.