Study of memory effect in an EOQ model for completely backlogged demand during shortage

TL;DR

This paper introduces a fractional order EOQ inventory model incorporating memory effects, demonstrating that longer memory enhances system profit during shortages.

Contribution

It proposes and solves a novel fractional order EOQ model that accounts for memory effects, extending traditional models without memory considerations.

Findings

Memory effects increase profit during shortages

Longer memory leads to higher profit in the model

Numerical example confirms the impact of memory on system performance

Abstract

The most commonly developed inventory models are the classical economic order quantity model, is governed by the integer order differential equations. We want to come out from the traditional thought i.e. classical order inventory model where the memory phenomena are absent. Here, we want to incorporate the memory effect that is based on the fact economic agents remember the history of changes of exogenous and endogenous variables. In this paper, we have proposed and solved a fractional order EOQ model with constant demand rate where the demand is fully backlogged during shortage time. Finally, a numerical example has been illustrated for this model to show the memory dependency of the system. The numerical example clears that for the considered system the profit is maximum in long memory affected system compared to the low memory affected or memory less system.