1. Introduction and Literature Review
Many researchers have studied inventory models for deteriorating items. Deterioration of product is a major
issue and observed in many products. Deterioration is a process in which product loses its utility due to damage,
decay and degradation. Electronic parts, fruits and vegetables, drugs and chemicals, dairy products, blood
components are some examples of deteriorating items. Hence, loss due to deterioration cannot be ignored while
formulating ordering and inventory strategy for deteriorating items.
Deteriorating inventory system was first studied by Ghare and Schrader (1963) and they derived mathematical
model for exponentially decaying inventory system with constant demand. Shah and Jaiswal (1977) derived
order level inventory model considering constant rate of deterioration. Covert et al. (1973) presented EOQ
model with variable deterioration using Weibull distribution. Later, Philip (1974) used variable deterioration
rate of three parameters Weibull distribution. In all these models, researcher assumed the constant demand.
Goyal et al. (2001) provided latest trends in modeling deteriorating inventory system and categorized inventory
model on the basis of demand variations