A Single Item Non Linear Programming (NLP) Economic Order Quantity Model with Space Constraint
This paper considers a single item non linear inventory problem with storage constraint where the demand of the items is constant. A Single item economic order quantity (EOQ) model is a stylized model using crisp arithmetic approach in decision making process with demand unit cost and dynamic ordering cost varies with the quantity produced/Purchased under two constraints. This paper considers the modification of objective function, limited storage area in the presence of estimated parameters. Due to increasingly market competition, space has become the biggest expense in company’s inventory expenditure and has frequently used as the most effective weapon by a lot of companies to reduce their costs in the short term. In this paper the concept of the Non-linear Programming technique is applied to solve a single item inventory problem with storage constraint. The solution is illustrated by numerical example and the results of different models are compared and investigation of the properties of an optimal solution allows developing an algorithm for obtaining solution through LINGO 13.0 version. Furthermore, sensitivity analysis of the optimal solution is studied with respect to changes in different parameter values and to draw managerial insights of proposed model over an infinite planning horizon.