R. Uthayakumar, S.K. Karuppasamy
Department of Mathematics
Gandhigram Rural Institute - Deemed University
Gandhigram, Tamilnadu, INDIA

Abstract. In most of the pharmaceutical inventory models, the holding cost and demand rate have been considered as a constant function. However, in Healthcare Industries, these factors are depending on time. In view of this , we develop a pharmaceutical inventory model in which demand rate is quadratic function of time, holding cost is linear function of time, defective rate is constant, backlogging rate depends on the length of the next replenishment and shortages are allowed. The model is solved analytically by minimizing the total inventory cost. The sensitivity of the model has been checked with respect to the various major parameters of the system. The results reveal that the proposed inventory model is more applicable for Healthcare Industries.

Received: February 15, 2016

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Key Words and Phrases: defective rate, pharmaceutical products, shortages, variable demand and variable holding cost

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