Authors : K.A. Adeleke and D.A. Agunbiade
Abstract: It is prohibited to have shortage of inventory since inventory cost is induced from the amount of product stored. This study presents inventory control theory in production inventory problem when shortages are allowed and backorder takes place. Three assumptions are considered here on shortage and backorders and this leads to three models. The first: when demand is fixed and known, production is infinite and shortages are allowed although, the cost of shortage is finite. Second when time (t) interval is fixed, replenishment is allowed and production rate is infinite. Third, when production rate is finite. It makes economic sense from the applications that for any production where shortages are allowed, backorder must follows to avoid lost in sales.
K.A. Adeleke and D.A. Agunbiade, 2010. Inventory Production Control Model with Back-Order when Shortages are Allowed. Journal of Modern Mathematics and Statistics, 4: 78-83.