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American Journal of Engineering Research (AJER)

2016
American Journal of Engineering Research (AJER)
e-ISSN: 2320-0847 p-ISSN : 2320-0936
Volume-5, Issue-6, pp-62-73
www.ajer.org
Research Paper

Open Access

An Inventory Model for Two Warehouses with Constant

Deterioration and Quadratic Demand Rate under Inflation and
Permissible Delay in Payments
U. B. Gothi1, Prachi Saxena2, Kirtan Parmar3
1

Head & Asso. Prof., Dept. Of Statistics, St. Xaviers College (Autonomous), Ahmadabad, Gujarat, India.
2
Research Scholar, Dept. Of Statistics, St. Xaviers College (Autonomous), Ahmadabad, Gujarat, India.
3
Adhyapak Sahayak, Dept. Of Statistics, St. Xaviers College (Autonomous), Ahmadabad, Gujarat, India.

ABSTRACT: In this paper, we have analysed a two-warehouse inventory model for deteriorating items with
quadratic demand with time varying holding cost. The effect of permissible delay in payments is also
considered, which is usual practice in most of the businesses i.e. purchasers are allowed a period to pay back
for the goods brought without paying any interest. To make it more suitable to the present environment the effect
of inflation is also considered. Our objective is to minimize the average total cost per time unit under the
influence of inflation. Numerical examples are provided to illustrate the model and sensitivity analysis is also
carried out for the parameters.
Keywords: Inventory model, Two-warehouse, Deterioration, Quadratic demand.

I.

INTRODUCTION

The main problem in an inventory management is to decide where to stock the goods. Generally, when
the products are seasonal or the suppliers provide discounts on bulk purchase, the retailers purchase more goods
than the capacity of their owned warehouse (OW). Therefore, the excess units over the fixed capacity w of the
owned warehouse are stored in rented warehouse (RW). Usually, the unit holding charge is higher in rented
warehouse than the owned warehouse, as the rented warehouse provides a better preserving facility resulting in
a lower rate of deterioration in the goods than the owned warehouse. And thus, the firm stores goods in owned
warehouse before rented warehouse, but clears the stocks in rented warehouse before owned warehouse.
Inventory models for deteriorating items were widely studied in the past but the two-warehouse
inventory issue has received considerable attention in recent years. Hartley  was the first person to develop
the basic two-warehouse inventory model. Chung and Huang  proposed a two-warehouse inventory model for
deteriorating items under permissible delay in payments, but they assumed that the deteriorating rate of two
warehouses were the same. An inventory model with infinite rate of replenishment with two-warehouse was
considered by Sarma . An optimization inventory policy for a deteriorating items with imprecise lead-time,
partially/fully backlogged shortages and price dependent demand under two-warehouse system was developed
by Rong et al. . Lee and Hsu  investigated a two-warehouse production model for deteriorating items
with time dependent demand rate over a finite planning horizon.
Earlier, in Economic Order Quantity (EOQ), it was usually assumed that the retailer must pay to the
supplier for the items purchased as soon as the items were received. In the last two decades, the influence of
permissible delay in payments on optimal inventory management has attracted attention of many researchers.
Goyal  first considered a single item EOQ model under permissible delay in payments. Aggarwal and Jaggi
 extended Goyals  model to the case with deteriorating items. Aggarwal and Jaggis  model was further
extended by Jamal et al.  to consider shortages. Chung and Huang  further extended Goyals  model to
the case that the units are replenished at a finite rate under delay in payments and developed an easy solution
procedure to determine the retailers optimal ordering policy. A literature review on inventory model under
trade credit is given by Chang et al. . Teng et al.  developed the optimal pricing and lot sizing under
permissible delay in payments by considering the difference between the selling price and the purchase cost and
also the demand is a function of price. For the relevant papers related to permissible delay in payments see
Chung and Liao , Liao (, ), Huang and Liao .
Recently, Kirtan Parmar and U. B. Gothi  have developed order level inventory model for
deteriorating items under time varying demand condition. Devyani Chatterji and U. B. Gothi  have developed

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American Journal Of Engineering Research (AJER)

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an integrated inventory model with exponential amelioration and two parameter Weibull deterioration. Ankit
Bhojak and U. B. Gothi  have developed inventory models for ameliorating and deteriorating items with time
dependent demand and inventory holding cost.
Parekh R.U. and Patel R.D.  have developed a two-warehouse inventory model in which they
assumed that the demand is linear function of time t. They took different deterioration rates and different
inventory holding costs in both OW and RW under inflation and permissible delay in payments.
In this paper, we have tried to develop a two-warehouse inventory model under time varying holding
cost and quadratic demand under inflation and permissible delay in payments. In the present work we have
considered same deterioration rate and same linear holding cost throughout the period [0, T]. In this model tr
and T are taken as decision variables. Numerical examples are provided to illustrate the model and sensitivity
analysis of the optimal solutions for major parameters is also carried out. The purpose of this study is to make
the model more relevant and applicable in practice.

II.

NOTATIONS

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.

Ir(t) : Inventory level for the rented warehouse (RW) at time t.

Io(t) : Inventory level for the owned warehouse (OW) at time t.
w : The capacity of the owned warehouse.
D(t) : Demand rate.
(t) : Rate of deterioration per unit time.
R : Inflation rate.
A : Ordering cost per order during the cycle period.
Cd : Deterioration cost per unit per unit time.
Ch : Inventory holding cost per unit per unit time.
Q : Order quantity in one cycle.
k : Purchase cost per unit.
p : Selling price per unit.
Ie : Interest earned per year
Ip : Interest charge per year.
M : Permissible period of delay in settling the accounts with the supplier
tr : time at which the inventory level reaches zero in RW in two warehouse system.
T : The length of cycle time.
TCi : Total cost per unit time in the ith case. (i = 1, 2, 3)

1.
2.
3.
4.
5.
6.
7.
8.

The demand rate of the product is D (t) = a + bt + ct2 (where a, b, c > 0).
Holding cost is a linear function of time and it is Ch = h+rt (h, r > 0) for both OW and RW
Shortages are not allowed.
Replenishment rate is infinite and instantaneous.
Repair or replacement of the deteriorated items does not take place during a given cycle.
OW has a fixed capacity W units and the RW has unlimited capacity.
First the units kept in RW are used and then of OW.
The inventory costs per unit in the RW are higher than those in the OW.

III.

IV.

ASSUMPTIONS

MATHEMATICAL MODEL AND ANALYSIS

At time t = 0 the inventory level is S units. From these w units are kept in owned warehouse (OW) and rest in
the rented warehouse (RW). The units kept in rented warehouse (RW) are consumed first and then of owned
warehouse (OW). Due to the market demand and deterioration of the items, the inventory level decreases during
the period [0, tr] and the inventory in RW reaches to zero. Again with the same effects, the inventory level
decreases during the period [tr, T] and the inventory in OW will also become zero at t = T.
The pictorial presentation is shown in the Figure 1.

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The differential equations which describe the instantaneous state of inventory at time t over the period [0, T] are
given by
dIr t
dt

dI0 t
dt
dI0 (t)
dt

Ir t a bt ct

I0 t 0
I0 t a bt ct

(1)

(0 t t r )

(2)

(tr t T)

(3)

t tr

Under the boundary conditions Ir(tr) = 0, Io(0) = w, and Io(T) = 0, solutions of equations (1) to (3) are given by
Ir t a t r t b a

I0 t w e

2
r

c b

3
r

4
r

a t r t t b

2
r

3
r

(4)

(5)

I0 t a T t b a

t
2

c b

V.

t
4

a T t t b

t
2

(6)

COSTS COMPONENTS

The total cost per replenishment cycle consists of the following cost components.
1) Ordering Cost
The operating cost (OC) over the period [0, T] is
OC = A

(7)

2) Deterioration Cost
The deterioration cost (DC) over the period [0, T] is
t

Rt
D C C d Ir ( t ) e
dt

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tr

I0 ( t ) e
0

T
Rt

d t I 0 ( t ) e
0

Rt

dt

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4 R 4 6 at 6 a t 2 6 b t 2 4 b t 3 4 ct 3 3ct 4 6 R 3 6 a 6 at 3b t 2 2 ct 3

r
r
r
r
r
r
r
r
r

24 R 2 a b 12 R b 2c 24c

Rtr
3R 3 a bt ct 2 2 R 2 a b bt 2ct ct 2 R b 2c 2ct 2c

1
2
e
r
r
r
r
r
r

5
4
2
2
3
3
4
3
2
3
12R
4 R 6 a T 6 b T 4 b T 4 cT 3c T 1 2 T 6 R 6 a 6 aT 3b T 2 cT

2
DC Cd

24 R a b 12 R b 2c 24c

12e RT 3R 3 a bT cT 2 2 R 2 a b b T 2cT cT 2 R b 2c 2cT 2c

tr R

we
1

(8)
3) Inventory Holding Cost
The inventory holding cost (IHC) over the period [0, t r] is
IHC = Holding cost during the cycle period T in RW [HC(RW)]
+ Holding cost during the cycle period T in RW [HC(OW)]
where,

tr

H C (R W )

( h rt ) I r ( t ) e

Rt

(9)

dt

h 4 8 R 4 a b t ct 2 3 6 R 3 a b b t 2 ct ct 2 2 4 R 2 b 2 c 2 ct 2 4 c R
r
r
r
r
r
r

R tr
4
2
3
3
2
2
3

e
48R
at r bt r ct r 36 R
2a at r 3bt r b t r 4ct r ct r

2
2

2
4
R

3
a

3
b

4
b
t

8
c
t

5
c
t

2
4
R

2
b

4
c

5
c
t

1
2
0
c

r
r
r
r

5
2
2
3
3
4

5 R 1 2 at r 6 at r 6 b t r 4 b t r 4 ct r 3c t r

4
3
2
3
2
6a 6at r 2ct r 3b t r 36 R a b 24 R b 2c 24cR

8R

4 R 4 1 2 at 6 at 2 6 b t 2 4 b t 3 4 ct 3 3c t 4
r
r
r
r
r
r

r R 3 7 2 R 3a 2 4 R 3c t 3 3 6 R 3b t 2 7 2 R 3a t

r
r
r

H C (R W )

12R

(10)
tr

H C (O W )

( h rt ) I
0

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T
0

(t) e

Rt

dt

( h rt ) I

(t) e

Rt

dt

tr

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American Journal Of Engineering Research (AJER)

1

(R )2

R tr
e

6
12R

RT
e

6
12R

2016

2
3
2

2 4 c R R 2 4 b 4 8 c ( 1 t r ) R 3 6 a 3 6 b ( 1 t r ) 3 6 c ( 2 t r t r )

4
2
2
2
3
3

R 4 8 a ( 1 t r T ) 2 4 b ( 2 t r t r T ) 1 6 c ( 3 t r t r T )

2
2
2
3
2
2
3 0 a ( 2 t r t r 2 T 2 T t r T ) 1 0 b ( 3 t r t r 3T 3T t r

5
R

3
3
4
3
3
4

2 T ) 5 c ( 4 t r t r 4 T 4 T t r 3 T )

R 4 8 b 2 4 c( 4 5 t r 5T ) R 2 7 2 a 2 4 b ( 3 4 t r) 2 4 c( 8 t r 5 t r2)

3
2
2
2
3
3
R 3 6 a ( 2 3t 2 T ) 3 6 b ( 3 t 2 t T ) 1 2 c( 1 2 t 5t 2 T )

r
r
r
r
r

2
2
2
3
2
2
3

2 4 a ( 4 t r 3t r 2 T 4 T t r T ) 8 b ( 9 t r 4 t r 3T 6 T t r 2 T )

4
r R

3
4
3
3
4

4 c ( 1 6 t r 5 t r 4 T 8 T t r 3 T )

2
3
2
2

30a ( 2 t r t r 2T t r 2T t r T t r)

5
3
4
2
2
2
3
4
5
3
3
2

R 1 0 b ( 3 t r t r 3T t r 3T t r 2 T t r ) 5c( 4 t r t r 4 T t r 4 T t r

3T t r )

1 2 0 c

2 4 c R 2 4 R 2 b 2 c (1 T )

3
2
4
2
3 6 R a b (1 T ) c ( 2 T T ) 4 8 R ( a b T c T )

2 4 R ( 2 b 4 c ) 2 4 R 2 3 a b ( 3 4 T ) c (8 T 5 T 2 )

3
2
3
2

r 3 6 R a ( 2 T ) b ( 3 T T ) c ( T 4 c T )

4
2
3

4
8
R
(
a
T

T
b

T
c
)

1
2
0
c

e t r ( R ) r ( R t t 1) h ( R ) r h ( R ) w
r
r

(11)
4) Interest Earned: There are two cases
Case 1: (M T)
In this case, interest earned is:
M

IE 1 p I e

(a b t ct

)t e

Rt

dt

IE 1

p Ie RM

e
4
R

2 R b 3M c 2 R 2 a 2 M b 3M 2c

2 R b 2 R 2a 6c
3R 3 M a M 2 b M 3c 6 c

(12)

Case 2: (M > T)
In this case, interest earned is:
T

IE 2 p I e [ ( a b t c t ) t e
2

Rt

d t ( a b T c T ) T ( M T )]
2

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American Journal Of Engineering Research (AJER)

1 RT
2 R b 3c T 2 R 2 a 2 b T 3c T 2 3 R 3 a T b T 2 c T 3 6 c 2 a R 2 2 b R 6 c}
4 e

IE 2 p I e R
(a b T c T 2 )T ( M T )

2016

(13)
5) Interest Payable: There are three cases described in figure-1
Case 1: (M tr T)
In this case, annual interest payable is:
tr
Rt
IP1 k I p I r ( t ) e
dt
M

tr

I0 (t) e

Rt

dt

tr

I0 (t) e

Rt

dt

1 2 R b 2 c ( 1 M ) 2 4 R 2 a b ( 1 M ) c ( M 2 2 M )

6 R 3 6 a ( 1 t M ) 3 b ( t 2 2 M ) 2 c ( t 3 3 M 2 M 3 )
r
r
r

24a 2 t t 2 2 M 2 M t M 2

r
r
r

e RM

R 4 2 b 1 2 t 2 8 t 3 1 2 M t 2 1 2 M 2 9 M 2 4 M 3

r
r
r

12R

3
4
3
3
4

4
c
4
t

4
M

4
M

2
4
c

r
r
r

1 2 R b 2 c (1 t ) 2 4 R 2 a b (1 t ) c ( 2 t t 2 )

r
r
r
r
R tr

3
2

3 6 R ( a b t r c t r ) 2 4 c

w e M (R ) e tr (R )

IP1 k I p

2
2

1 2 R b 2 c ( T 1) 2 4 R a b (1 T ) c ( 2 T T )

RT

3
2

3 6 R ( a b T c T )

2
2
1

1 2 R b 2 c ( 1 t r ) 2 4 R a b ( 1 t r ) c ( 2 t r t r )

5
12R

R tr
3
2
2
2
3
3

6 R 6 a ( 1 t r T ) 3 b ( 2 t r t r T ) 2 c ( 3 t r t r T )

2
2
2
3
2
2
3

6 a ( 2 t r t r 2 T 2 T t r T ) 2 b ( 3 t r t r 3T 3T t r 2 T )

4R

3
4
3
3
4

c( 4 t r t r 4 T 4 T t r 3T )

(14)
Case 2: (tr M T)
In this case, interest payable is:
T

IP 2 k I p

(t) e

Rt

dt

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2016

e RT 12 R b 2c 1 T 24 R 2 a b 1 T c 2T T 2 36 R 3 bT cT 2 1

1 2 R b 2 c 1 M 2 4 R 2 a b 1 M c 2 M M 2
k Ip

IP 2
5
1 2 R e RM 6 R 3 6 a 1 T M 3 b T 2 2 M M 2 2 c T 3 3 M 2 M 3

2
2
2
2
3
2

6 a 2 T T 2 M 2 M T M 2 b 3T 3M T 2 T 3M M 3

4R 4

c 4 T 3 3T 4 4 M 3 M 4 4 M T 3

2 4 c

24c

(1 5 )

Case 3: (M T)
In this case, no interest charges are paid for the item and so
IP3 = 0
(16)
Substituting values from equations (7) to (11) and equations (12) to (16) in equations (17) to (19), the retailers
total cost during a cycle in three cases will be as under:
T C1
TC2

TC3

1
T
1
T

1
T

[ A H C ( O W ) H C ( R W ) D C IP1 IE 1 ]

(17)

[ A H C ( O W ) H C ( R W ) D C IP2 IE 1 ]

(18)

[ A H C ( O W ) H C ( R W ) D C IP3 IE 2 ]

(19)

Our objective is to determine the optimum values tr* and T* of tr and T respectively so that TCi is minimum.
Note that tr* and T* can be obtained by solving the equations
T C i
tr

and

T C i
T

(i = 1, 2, 3)

2
2
2

T C i T C i T C i

t r T t r T
*
*
t r t r ,T T

TCi

2
t r
*
*

t r t r ,T T

(20)

(21)

The optimum solution of the equations (20) can be obtained by using appropriate software. The above
developed model is illustrated by the means of the following numerical example.
Numerical Example 1
To illustrate the proposed model, an inventory system with the following hypothetical values is considered. By
taking A = 150, w = 100, a = 8, b = 0.5, c = 0.2, k = 10, p = 15, = 0.2, h = 1, r = 0.5, R = 0.06, M = 10, Cd = 4,
Ip = 0.15 and Ie = 0.12 (with appropriate units). The optimal values of tr and T are tr* = 13.71456792,
T* = 22.25988127 units and the optimal total cost per unit time TC = 3.346889173 units.
Numerical Example 2
By taking A = 150, w = 100, a = 8, b = 0.5, c = 0.2, k = 10, p = 15, = 0.2, h = 1, r = 0.5, R = 0.06, M = 16, Cd
= 4, Ip = 0.15 and Ie = 0.12 (with appropriate units). The optimal values of tr and T are tr* = 13.51613807,
T* = 22.37726544 units and the optimal total cost per unit time TC = 3.345597534 units.
Numerical Example 3
By taking A = 150, w = 100, a = 8, b = 0.5, c = 0.2, k = 10, p = 15, = 0.2, h = 1, r = 0.5, R = 0.06, M = 25, Cd
= 4, Ip = 0.15 and Ie = 0.02 (with appropriate units). The optimal values of tr and T are tr* = 13.18456160,
T* = 21.82708029 units and the optimal total cost per unit time TC = 3.354324259 units.

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2016

SENSITIVITY ANALYSIS

Sensitivity analysis depicts the extent to which the optimal solution of the model is affected by the
changes in its input parameter values. Here, we study the sensitivity for total cost per time unit TC with respect
to the changes in the values of the parameters A, w, a, b, k, p, , h, r, R, M, Cd, Ip and Ie.
The sensitivity analysis is performed by considering variation in each one of the above parameters keeping all
other remaining parameters as fixed.
Table 1: Partial Sensitivity Analysis Based Numerical Example 1
Parameter

Cd

Ip

Ie

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%
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20

tr
13.71447314
13.71452053
13.71461530
13.71466269
13.71431025
13.71443908
13.71467456
13.71482346
13.84152478
13.76345536
13.65129742
13.58816752
13.8042342
13.7378448
13.65365824
13.59333966
13.40809897
13.57726226
13.74245234
13.93224244
13.67366618
13.69435261
13.72634634
13.75234245
13.69744424
13.70601765
13.72309523
13.74735242
13.83833426
13.77588804
13.70534424
13.62068895
13.20357242
13.53183825
13.87425830
14.01504787
13.58566195
13.65213269
13.77312758
13.89424234
13.89752709
13.80659136
13.62292868
13.51435235
14.31247578
14.00173743
13.44791651
13.19928734
13.67366619
13.69435261
13.71559399
13.74230052
13.69744424
13.70601764
13.72309523
13.74455743

T
22.25972159
22.25980143
22.25996110
22.26004094
22.25885504
22.25936817
22.25995064
22.26063452
22.41111398
22.22684594
22.18409989
22.10821091
22.42534248
22.25457424
22.16879359
22.07839783
21.84679176
22.07546066
22.24245492
22.46575234
22.27401292
22.26692751
22.25354735
22.23045532
22.23103278
22.24547596
22.27424896
22.30465234
22.38734515
22.32329591
22.25552357
22.17354374
22.59345423
21.99245885
22.49184150
22.69505830
22.14684808
22.20358478
22.31551645
22.38093463
22.42210880
22.34812012
22.16236931
22.02543452
23.09785921
22.66127789
21.88887087
21.54435448
22.27401293
22.26692751
22.25534246
22.23734623
22.23103278
22.24547596
22.27424897
22.29057395

TC
3.346912472
3.346900821
3.346877526
3.346865879
3.347103806
3.346996485
3.346673450
3.346262374
3.343914723
3.344374543
3.348403083
3.349934358
3.336424245
3.346352560
3.356457972
3.366016024
3.374305795
3.359071177
3.327533453
3.289724248
3.346956312
3.346918734
3.346874345
3.346844245
3.347317011
3.347104047
3.346672374
3.344693510
3.342301127
3.344583519
3.346834535
3.349345345
3.327351645
3.338248686
3.354473847
3.361185927
3.347400392
3.347388352
3.345980907
3.343414543
3.151146989
3.264790826
3.407779167
3.553623423
3.390785280
3.367959896
3.327316573
3.309038613
3.346956309
3.346918732
3.346876232
3.346834321
3.347317012
3.347104047
3.346672377
3.346042343

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Parameter

Cd

Ip

Ie

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%
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20

tr
13.51604909
13.51609358
13.51618256
13.51622705
13.51591199
13.51602503
13.51625110
13.51636414
13.64333127
13.57965806
13.45277320
13.38956532
13.63481162
13.57516715
13.45771684
13.39989606
13.21581454
13.38150471
13.62768352
13.72160264
13.52523031
13.52064253
13.51171465
13.50737009
13.48614532
13.50117694
13.53102955
13.54585219
13.63360874
13.57429871
13.45908327
13.40309302
13.09635691
13.32131908
13.68655241
13.83692044
13.28075404
13.40434365
13.61670836
13.70665010
13.7357502
13.60291751
13.42959475
13.34412799
13.79534277
13.65323617
13.38374436
13.30585885
13.52523031
13.52064253
13.51171465
13.50737009
13.48614532
13.50117694
13.53102956
13.54585219

T
22.37711758
22.37719151
22.37733936
22.37741330
22.37631039
22.37678794
22.37774291
22.37822034
22.52035345
22.44885384
22.30559047
22.23383113
22.54865775
22.46261813
22.29259521
22.20860292
21.99050041
22.20451234
22.51962059
22.63894021
22.39237401
22.38475036
22.36991547
22.36269679
22.32743475
22.35240706
22.40201124
22.42664574
22.49599813
22.43635440
22.31871718
22.26069621
21.86323698
22.13846509
22.58653786
22.77152068
21.98653331
22.19159195
22.54444818
22.69408388
22.58242423
22.45823933
22.28682626
22.19014080
22.75459060
22.56236200
22.19884321
22.05758387
22.39237401
22.38475036
22.36991547
22.36269679
22.32743476
22.35240706
22.40201124
22.42664575

TC
3.345621306
3.345609420
3.345585645
3.345573756
3.345813273
3.345705399
3.345489679
3.345381840
3.342216825
3.343898291
3.347314233
3.349048078
3.326087512
3.335847649
3.355336689
3.365064684
3.373941719
3.358192800
3.335297864
3.326720367
3.345042694
3.345320005
3.345875258
3.346153170
3.347000083
3.346302662
3.344884651
3.344163978
3.340773135
3.343175195
3.348039373
3.350500007
3.326199607
3.336626683
3.353410265
3.360283803
3.342745114
3.344844285
3.345332544
3.344337937
3.123457239
3.262047752
3.407275777
3.454355134
3.367050204
3.356125211
3.335438851
3.315277583
3.345042693
3.345320005
3.345875258
3.346153170
3.347000084
3.346302664
3.344884652
3.344163979

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Table 3: Partial Sensitivity Analysis Based Numerical Example 3

Parameter

Cd

Ie

VII.

%
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20
20
10
+ 10
+ 20

tr
13.18446186
13.18451173
13.18461148
13.18466134
13.18432625
13.18467927
13.18479693
13.18479693
13.31931477
13.24755683
13.11733530
13.05021083
13.31054574
13.24726480
13.12242898
13.06085992
12.86485735
13.04146032
13.20457248
13.40229561
13.22525283
13.20479079
13.16455998
13.14478079
13.30282615
13.24312262
13.12709971
13.07069582
12.68846444
12.95550184
13.38337921
13.55768506
13.05396416
13.11901453
13.25061016
13.31716504
13.34646353
13.25268542
13.11295366
13.03955684
13.46399819
13.32175500
13.05211161
12.92412517
13.22525283
13.20479079
13.16455998
13.14478079

T
21.82691502
21.82699765
21.82716293
21.82724556
21.82603960
21.82760057
21.82812078
21.82812078
21.98110765
21.90558324
21.74978254
21.67229643
22.01073005
21.91859734
21.73617509
21.64587791
21.40993104
21.64109189
21.90587584
22.10781077
21.89451611
21.86060235
21.79394096
21.76117570
21.94904273
21.88778028
21.76692854
21.70731147
21.18106899
21.52931617
22.08494842
22.31066367
21.61080343
21.71850074
21.93655146
22.04692377
22.79342342
21.88025799
21.75863725
21.67944485
22.20643506
22.01316892
21.64771033
21.47464179
21.89451611
21.86060235
21.79394096
21.76117570

TC
3.354349092
3.354336674
3.354311843
3.354299426
3.354549367
3.354211723
3.354099199
3.354099198
3.350336381
3.352374535
3.356341913
3.358374908
3.333785661
3.344061525
3.364573350
3.374808297
3.384654039
3.367810636
3.334523534
3.334085768
3.353281835
3.353796635
3.354864818
3.355418422
3.349173527
3.351739476
3.356927110
3.359547320
3.338032570
3.346696600
3.361083736
3.367111872
3.336519252
3.345348582
3.363450676
3.372732410
3.195525833
3.270702764
3.415650030
3.462226585
3.375664255
3.364796485
3.344219928
3.334458659
3.353281835
3.353796633
3.354864818
3.355418421

GRAPHICAL PRESENTATION

Figure 2

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2016

Figure 3

Figure 4

VIII.

CONCLUSIONS

From the Table 1, we observe that as the values of the parameters a, b, h, r and increase the average
total cost also increases and for the values of the parameters A, w, c, k, p, M, Cd, Ip and Ie the average total
cost decreases.

Table 2 shows that as the values of the parameters a, b, k, h, r, , Ip and M increase the average total cost
also increases and for the values of the parameters A, w, c, p, Cd and Ie the average total cost decreases.

From the Table 3, we note that as the values of the parameters a, b, p, h, r, M, and Ie increase the
average total cost also increases and for the values of the parameters A, w, c and Cd the average total cost
decreases.

From the Figure 2, we observe that the total cost per time unit is highly sensitive to changes in the values
of c, Cd, moderately sensitive to changes in the values of b, r and less sensitive to changes in the values of
A, w, a, k, p, h, M, Cd, Ip, Ie.

From the Figure 3 we note that the total cost per time unit is highly sensitive to changes in the values of
c, b, r, Cd, moderately sensitive to changes in the values of a, h and less sensitive to changes in the values of
A, w, p, M, k, Ip, Ie.

Figure 4 shows that the total cost per time unit is highly sensitive to changes in the values of b, c, M, r,
Cd, moderately sensitive to changes in the values of a, h and less sensitive to changes in the values of A, w,
p, Ie.

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