Optimization of Inventory Model with the incorporation of the associated costs of Product innovation

Abstract

In these days people are at the back of novelty and innovation which have made them crazy over inventive ideas and its implementation.This fanatical intention of the people has emerged as the drive for the production sectors to opt for Product Innovation (PI), which is a growing and much focused area by the managerial people. PI is not a single entity rather it is the composition of product design, manufacturing techniques, expertise opinion, initialization and profitability assessment. These components of PI are highly significant as it contributes to the development of new products. In recent times the tactics of PI is used as weapon against the competitors in global markets. To make the PI successful the industrial sectors must allot monetary values to it, which have to be incorporated in the total cost of economic production quantity model to determine the optimality. This research work put forth a new realistic inventory model with the inclusion of the concept of PI to reflect the existing situations in the industrial sectors. This paper also scatters light on the different strategies used by the production sectors to capture the attention of the consumers for enhancing the purchasing behaviour.