Macro Economic Variable Base Inventory Control Model for Perishable Items

In production systems there are situations in which it is not possible to have a single rate of production throughout the production period and the same cost for each individual unit over the decades. Items are produced at different rates and at different sub-periods so as to meet the requirement. The costs incurred changes as the time progresses due to inflation. The price may vary for each unit depending not only on inflation but also various factors as demand, availability, working unit, setup place etc. This paper models a situation by assuming constant rate of demand, varying rates of production and a constant inflation rate. Special cases are also discussed and a case study is done.