Optimal pricing and replenishment policies for instantaneous deteriorating items with backlogging and trade credit under inflation

Authors

  • R. Sundara Rajan Department of Mathematics, PSNA College of Engineering and Technology, Dindigul, Tamilnadu, 624 622, India
  • R. Uthayakumar Department of Mathematics, Gandhigram Rural Institute—Deemed University, Gandhigram, Tamilnadu, 624 302, India
Abstract:

In this paper we develop an economic order quantity model to investigate the optimal replenishment policies for instantaneous deteriorating items under inflation and trade credit. Demand rate is a linear function of selling price and decreases negative exponentially with time over a finite planning horizon. Shortages are allowed and partially backlogged. Under these conditions, we model the retailer’s inventory system as a profit maximization problem to determine the optimal selling price, optimal order quantity and optimal replenishment time. An easy-to-use algorithm is developed to determine the optimal replenishment policies for the retailer. We also provide optimal present value of profit when shortages are completely backlogged as a special case. Numerical examples are presented to illustrate the algorithm provided to obtain optimal profit. And we also obtain managerial implications from numerical examples to substantiate our model. The results show that there is an improvement in total profit from complete backlogging rather than the items being partially backlogged.

Upgrade to premium to download articles

Sign up to access the full text

Already have an account?login

similar resources

Optimal dynamic pricing and replenishment policies for deteriorating items

Article history: Received January 22 2014 Received in Revised Format June 6 2014 Accepted June 18 2014 Available online June 23 2014 Marketing strategies and proper inventory replenishment policies are often incorporated by enterprises to stimulate demand and maximize profit. The aim of this paper is to represent an integrated model for dynamic pricing and inventory control of deteriorating ite...

full text

Pricing and Replenishment Policies for Imperfect Quality Deteriorating Items Under Inflation and Permissible Delay in Payments

Usually it is assumed that all items in a lot are of good quality, but in reality this assumption may not always be pertinent. Thus, the inspection of lots becomes essential in almost all organizations. Moreover, its role becomes more vital when the items are deteriorating in nature. Owing to this fact, this paper investigates the impact of initial inspection on retailer’s pricing and ordering ...

full text

optimal economic ordering policy for deteriorating items under two-level trade credit and inflation

in this paper, we develop an inventory model with delay in payments for deteriorating items. in our model, retailer who purchases the items enjoys a fixed credit period offered by his/her supplier and, in turn, also offers a credit period to his/her customers in order to promote the market competition. the demand is assumed to be linear function of the retailer's current-stock level. the effect...

full text

Retailer’s Optimal Pricing and Ordering Policies for Non-Instantaneous Deteriorating Items with Price-Dependent Demand and Partial Backlogging

An inventory system for non-instantaneous deteriorating items with price-dependent demand is formulated and solved. A model is developed in which shortages are allowed and partially backlogged, where the backlogging rate is variable and dependent on the waiting time for the next replenishment. The major objective is to determine the optimal selling price, the length of time in which there is no...

full text

Two-Warehouse Inventory Model for Deteriorating Items with Time-Dependent Demand and Partial Backlogging Under Inflation

This paper deals with a two-warehouse inventory model for deteriorating items with time dependent demand and partial backlogging under inflation. It is assumed that deterioration of items follows two-parameter Weibull distribution and demand rate varies exponentially with time. Shortages are allowed and partial backlogging depends on waiting time of next replenishment. A numerical example is pr...

full text

My Resources

Save resource for easier access later

Save to my library Already added to my library

{@ msg_add @}


Journal title

volume 13  issue 4

pages  -

publication date 2017-12-01

By following a journal you will be notified via email when a new issue of this journal is published.

Hosted on Doprax cloud platform doprax.com

copyright © 2015-2023