Inventory model with multivariate demands in different phases with customer returns and inflation.

This paper presents an EOQ model of deteriorating item with the demand depending on three significant factors like inventory level, time and price. Shortages are allowed and partially backordered with a time dependent rate. The concept of customer returns as a function of price and demand has been included. A profit function is formulated and maximised for the considered system. A numerical example has been given to illustrate the model and sensitivity analysis is performed in order to examine the impact of various parameters on the optimal policy.