Published Paper Details:

The classical economic order quantity (EOQ) model is a cost-minimization inventory model with a constant demand rate. It is the most successful model of all inventory theories because it is simple to understand and easy to apply. However, the demand rate remains stable only in the maturity stage of a product life cycle. Therefore, using the EOQ formulation in stages other than the maturity stage will cause varying magnitudes of error. In the growth stage of a product life cycle, the demand rate can be well approximated by a linear form. This paper deals with an optimal inventory replenishment policy for a non-deteriorating items and shortages. Two models are developed (i) inventory model for non-deteriorating items, (ii) inventory model with shortages. A mathematical model is developed for each model and the optimal production lot size which minimizes the total cost is derived. The validation of result in this model was coded in Microsoft Visual Basic 6.0