EOQ model for deteriorating items with exponential demand rate and shortages

In this paper, we develop an inventory model for deteriorating items with exponential time dependent demand rate. In this proposed model, shortages are allowed and partially backlogged. The model is explained with the help of numerical examples. We also show that total cost function is convex with time. Sensitivity analysis of the optimal solution with respect to various parameters of the system is given and results are discussed in details. Taylor’s series expansion is used for finding closed form optimal solution. Some results have been also obtained.