INVENTORY MODEL FOR DETERIORATING ITEMS WITH REVENUE SHARING ON PRESERVATION TECHNOLOGY INVESTMENT UNDER PRICE SENSITIVE STOCK DEPENDENT DEMAND

The objective of this research is to tackle the emerging problem of jointly determining theoptimal retail price, the replenishment cycle, and the cost of preservation technology investment from an integrated perspective among the supplier and the manufacturer. This paper deals an integrated single-manufacturer single-retailer supply chain model for deteriorating items under revenue sharing on preservation technology investment. The proposed model is developed under the contract that the manufacturer offers the retailer for a percentage of revenue sharing on preservation technology investment. The market demand is assumed to be dependent on both the on-hand stock and price, and the manufacturer & the retailer are in an agreement of lot-for-lot policy. Numerical & graphical analysis is given to illustrate the model.