Department of Mathematics

Integral University, Lucknow

Research Synopsis
On
“Effect of Deterioration on Inventory with and
without shortages and Different Demand rates”

Under the supervision of

Dr. NURUL AZEEZ KHAN
Department of Mathematics
Integral University,
Lucknow.

Submitted By:
Mr. Nilesh Kumar
Date of Registration:
29 October, 2020
 Enrollment No: 2001187
PROPOSED OBJECTIVES:

The primary objectives of inventory management are:

1. To minimize the possiblity of distruption in all the function schedule.
2. To maintain sufficient stock of raw material.
3. To maintain the associated cost and time.
4. To ensure that finished goods are available for delivery to customer to
fulfill their demands.
5. To maintain smooth operation and efficient customer service.
6. To protect the inventories against deterioration.
7. To contoll the inventories and keep it at optimum level.
8. To maximize the profit functions.
Introduction:

The purpose of inventory theory is to determine rules that management can

use to minimize the cost associated with maintaining inventory and meeting
customer demand.

The “Inventory management system’’ has been developed to override the

problems prevailing in the practicing manualsystem. This software is supported to
eliminate and in some cases reduce the hardship faced by this existing system.
Moreover this system is designed for the particular need of company to carry out
operations in a smooth and effective manner.

The application is reduced as much as possible errors while entering the data
it also provides error message while entering invalid data. No formal knowledge is
needed for the user to use this system. Thus by this all it proves it is user-friendly.
Inventory ManagementSystem, as described above, can lead toerrorfree, secure,
reliable and fast managementsystem. It can assist the user to concentrate on their
other activities rather to concentrate on the recordkeeping. Thus it will help
Organization in better utilization of resources.

Every organization, weather big or small, has challenges to overcome and

managing the information of inventory, stock, sells, product, category, customers.
Every Inventory Management System has different Stock needs, therefore we
design exclusive employee management system that are adapted to your
managerial requirements .This is designed to assist in strategic planning , and will
help you ensure that your organization is equipped with the right level of
information and details for your future goals. Also, for those busy executive who
are always on the go , our systems come with remote access features, which will
allow you to manage your workforce anytime at all time . These systems will
ultimately allow you to better manage resources.

An inventory consists of usable but idle resources such men, machines,

materials or money. When resources involved are material, the inventory is also
called “stock”. An inventory problem is said to the exist if either the resources are
subjected to control or if there is at least one such cost that decreases as inventory
increases. The objective is to minimize total (actual or expected) cost. However, in
situations where inventory affects demand, the objective may also be to maximize
profit

Types of inventories:

Inventories are generally classified into following two types :

1. Direct Inventories: They include items that are directly used for production
and are classified as :
(a) Production inventory: Item such as raw materials, components and
subassemblies used to produce the final product.
 (b) Work in Process Inventory: Items in semi-finished form or products at
different stages of production.
(c) Finished Goods Inventory: This includes the final products ready for
dispatch to consumers or distributors.
(d) Miscellaneous Inventory :All other items such as scrap, obsolete and
unsalable products, stationery and other items used in office , factory
and sales department ,etc.

2. Indirect Inventories : Indirect inventories may be classified as:

(a) Transit or pipeline Inventories: Also called movement inventories, they
consist of items that are currently under transportation e .g. coal being
transported from coalfield to a thermal plant.
(b) Buffer Inventories: They are required as protection against the
uncertainties of Supply And Demand. A Company well know the average
demand of item that it need, however, actual demand may turn out to be
quite different –it may well exceed the average value. Similarly , the
average delivery period could be much more .Such situations require extra
stock of item to reduce the number of stock-out or back-order .This extra
stock in excess of average demand during the lead time is called buffer
stock ( or safety stock or cushion stock )
(c) Decoupling Inventories: They are required to decouple or disengage the
different parts of production system. For an item that requires processing
on a series of different machines with different processing time, it is must
to have decoupling inventories of the item between the various machines
for smooth and continuous production. The decoupling inventories act as
shock absorbers in case of varying work-rate, machine breakdowns
orfailures, etc.
 (d) Seasonal Inventories:Some items have seasonal demands e.g. demand of
woolentextiles in winter, coolers and air conditioners in summer ,raincoats
in rainy season etc. Inventories for such items have to be maintained to
meet their high seasonal demand.
(e) Lot Size Inventories : Items are usually purchased in lots to
(i) Avail price discount
(ii) Reduce transportation and purchase cost
(iii)Minimize handling and receiving cost.

Lot size or cycle inventories are, therefore, held by purchasing items in lots
rather than their exact quantities required. For example, a textile industry
may buy cotton in bulk during cotton season rather than buying it every
day.

(f) Anticipation Inventories: They are held to meet the anticipated demand .
Purchasing of crackers well before Diwali, fans before the approaching
summer , pillingup of raw material in the face om imminent transporters’
strike are example of anticipation inventories

Inventory Cost:
The four cost considered in inventory control models are.
(1) . Purchase cost
(2) . Inventory carrying or stock holding costs
(3) Procurement cost( for bought-outs) or setup costs ( for made-ins)
(4) . Shortage costs ( due to disservice to thecustomers).
References:

1. Murty Rama, P.(2005) : Operations Research, New Age India Publications,

New Delhi, India.
2. Taha, H.A. (2007): Operations Research-An Introduction, Pearson Education,
USA.
3. C.K Jaggi, K.K. Aggarwal and S.K.Goel (2007): Optimal order policy for
deteriorating items with in flat ion induced demand, International Journal of
Production Economics,103(2), p p. 707-714.
4. Srinivasan, G. (2010): Operations Research: Principles and Applications. PHI
Publication, New Delhi, India.
5. Mandal, B. (2010): An EOQ Inventory Model for Weibull Distributed
Deteriorating under Ramp Type Demand and Shortages, Opsearch, 42(2), 158
– 165.
6. Amutha, R. and Chandrasekaran, E. (2013): An EOQ Model for
Deteriorating Items with Quadratic Demand and Time Dependent Holding
Cost, International Journal of Emerging Science and Engineering, 1(5), 5 – 6.
7. Chaudhry, R.R. and Sharma, V. (2013): An inventory model for deteriorating
items with Weibull deterioration with time dependent demand and shortages,
Research journal of management sciences. Vol.2, No.3, pp.1-4.
8. Karmakar, B. and Choudhuri, K.D. (2013): Inventory models with ramp type
demand for deteriorating items with partial backlogging and time varying
holding cost, Yugoslav Journal of Operation Research, 23(2), pp.1-17.