Determination of Optimum Quantity Cost and Cycle Time Using Inventory Model with Stock Level Dependent Demand Rate And Variable Holding Cost

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This thesis seeks to address the problem of inventory management Mantrac Ghana Limited. The objective of this study includes: (a) To model Mantrac Ghana Limited’s inventory cost as Retroactive Holding Cost problem. (b) To determine optimal order quantity, reorder point and optimal total cost of Mantrac Ghana Limited using Retroactive Holding Cost increase. Inventory models in which the demand rate depends on the inventory level are based on the common real-life observation that greater product availability tends to stimulate more sales. 4 This thesis considers the inventory policy for an item with a stock-level dependent demand rate and a storage-time dependent holding cost. The holding cost per unit of the item per unit time is assumed to be an increasing function of the time spent in storage. Two time-dependent holding cost step functions are mentioned: Retroactive holding cost increase, and incremental holding cost increase. Procedures are developed for determining the optimal order quantity and the optimal cycle time using Retroactive holding cost increase.
A thesis submitted to the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirement for the award of Master of Science degree in Industrial Mathematics, June-2013