An optimal production-inventory model for deteriorating items with multiple-market demand

The global markets of today offer more selling opportunities to the deteriorating items' manufacturers, but also pose new challenges in production and inventory planning. From a production management standpoint, opportunities to exploit the difference in the timing of the selling season between geographically dispersed markets for deteriorating items are important to improving a firm's profitability. In this paper, we examined the above issue with an insightful production-inventory model of a deteriorating items manufacturer selling goods to multiple-markets with different selling seasons. We also provided a solution procedure to find the optimal replenishment schedule for raw materials and the optimal production plan for finished products. A numerical example was then used to illustrate the model and the solution procedure. Finally, sensitivity analysis of the optimal solution with respect to major parameters was carried out. © 2009 Elsevier B.V. All rights reserved.