TOTAL REVENUE FUNCTION FOR SOME NON-REGULAR FIXED LIFETIME INVENTORY SYSTEM

ABSTRACT
The fixed lifetime inventory system is a system in which items outdate at the end of their useful period in inventory and are discarded. In this work, we refer to this kind of inventory system as a regular fixed lifetime inventory system and introduce the concept of non-regular fixed lifetime inventory system. Derived is a revenue function that will enable the inventory manager to determine the revenue generated over a period of time and also to keep track of items that are in or out of demand.
Using the rooms in a hotel as a case study, the work derives the total revenue function for the non-regular fixed lifetime inventory system. We introduce the demand matrix for the non-regular fixed lifetime inventory system and use it to determine the level of patronage for a hotel. Also, we are able to trace the number rooms in demand and rooms available to meet demand.
In conclusion, the derived revenue model was used to analyze the records of four hotels A, B, C and D for a period of seven (7) days. Their level of patronage was low since most of the entries in the demand matrix were zeroes. The revenue generated over the period was computed and the outdate and shortage cost was also computed for the same period.