Analysis of An Inventory Model for Linear Demand with Two Levels of Production Under Influence Rate

Abstract

This article presents an analysis of an inventory model in the context of linear demand with dual production levels, focusing on deteriorating items and the impact of inflation. This study investigates the intricate relationship between inventory management and economic factors, offering insights into optimizing production decisions and inventory control strategies. The research develops into a scenario where a business faces two production options: a lower level for regular demand and a higher level to address fluctuations or surges.A significant aspect of this study is the incorporation of inflation's influence on inventory dynamics. Inflation can significantly affect production costs, demand, and the overall value of inventory. The analysis examines the interplay between inflation and the optimal production quantity, aiming to develop strategies that maintain inventory levels while mitigating the impact of inflation on costs and profits. By applying mathematical formulations and optimization techniques, this research offers quantitative insights into the optimal order quantities, replenishment strategies, and pricing policies that can be adopted to address the challenges posed by deteriorating items and inflation. Thestudy's findings provide businesses with a comprehensive understanding of how to strategically manage inventory levels and production decisions to navigate the challenges posed by deteriorating items and inflation, ultimately leading to improved operational efficiency and financial performance.