Coordinating replenishment and pricing policies for non-instantaneous deteriorating items with price-sensitive demand

This article will formulate and solve an inventory system with non-instantaneous deteriorating items and price-sensitive demand. The purpose of this study is to determine the optimal selling price and the length of replenishment cycle such that the total profit per unit time has a maximum value for the retailer. We first establish a proper model for a mathematical formulation. Then we develop several theoretical results and provide the decision-maker with an algorithm to find the optimal solution. Finally, two numerical examples are provided to illustrate the solution procedure, and a sensitivity analysis of the optimal solution with respect to major parameters is carried out.

[1]  C. Dye.  Joint pricing and ordering policy for a deteriorating inventory with partial backlogging , 2007 .

[2]  Jinn-Tsair Teng,et al.  Production, Manufacturing and Logistics Retailers optimal pricing and lot-sizing policies for deteriorating items with partial backlogging , 2004 .

[3]  L. Ouyang,et al.  An optimal replenishment policy for non-instantaneous deteriorating items with stock-dependent demand and partial backlogging , 2006 .

[4]  S. K. Goyal,et al.  Recent trends in modeling of deteriorating inventory , 2001, Eur. J. Oper. Res..

[5]  Elsayed A. Elsayed,et al.  Analysis of inventory systems with deteriorating items , 1983 .

[6]  Arthur F. Veinott,et al.  Analysis of Inventory Systems , 1963 .

[7]  Hui-Ming Wee,et al.  Joint pricing and replenishment policy for deteriorating inventory with declining market , 1995 .

[8]  S. Mukhopadhyay,et al.  An EOQ model with two-parameter Weibull distribution deterioration and price-dependent demand , 2005 .

[9]  Y. K. Shah.  An Order-Level Lot-Size Inventory Model for Deteriorating Items , 1977 .

[10]  Prakash L. Abad,et al.  Optimal pricing and lot-sizing under conditions of perishability, finite production and partial backordering and lost sale , 2003, Eur. J. Oper. Res..

[11]  S. Mukhopadhyay,et al.  Joint pricing and ordering policy for a deteriorating inventory , 2004, Comput. Ind. Eng..

[12]  George C. Philip,et al.  A Generalized EOQ Model for Items with Weibull Distribution Deterioration , 1974 .

[13]  H. Wee.  A replenishment policy for items with a price-dependent demand and a varying rate of deterioration , 1997 .

[14]  Morris A. Cohen.  Joint pricing and ordering policy for exponentially decaying inventory with known demand , 1977 .

[15]  H. Wee.  Deteriorating inventory model with quantity discount, pricing and partial backordering , 1999 .

[16]  Wen-Chuan Lee,et al.  An EOQ model for deteriorating items with time-varying demand and shortages , 2000, Int. J. Syst. Sci..

[17]  P. Abad.  Optimal pricing and lot-sizing under conditions of perishability and partial backordering , 1996 .

[18]  H. Wee,et al.  Replenishment and pricing policy for deteriorating items taking into account the time-value of money , 2001 .

[19]  Angappa Gunasekaran,et al.  An integrated production-inventory-marketing model for deteriorating items , 1995 .

[20]  Zhao Pei-xin,et al.  An EOQ Model for Items with Weibull Distribution Deterioration , 2007, 2007 2nd IEEE Conference on Industrial Electronics and Applications.