Inventory and pricing strategies for deteriorating items with limited capacity and time-proportional backlogging rate (original) (raw)
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Mathematical Problems in Engineering, 2009
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 inventory shortage, and the replenishment cycle time simultaneously such that the total profit per unit time has a maximum value. An algorithm is developed to find the optimal solution, and numerical examples are provided to illustrate the theoretical results. A sensitivity analysis of the optimal solution with respect to major parameters is also carried out.
2014
A number of inventory models have discussed the effect of deterioration in the past researches. Generally it has been assumed that items start deteriorating as soon as they arrive in the warehouse. But in real life there are numerous products like fruits, vegetables, meat, milk etc. that have a shelf life and start deteriorating after a time lag. This means that for some initial period of time, there is no deterioration in items. This phenomenon is termed as non-instantaneous deterioration and the items are termed as non-instantaneous deteriorating items. In the present paper, an inventory model for non-instantaneous deteriorating items with price dependent demand has been developed. Moreover, the holding cost is assumed to be time dependent. Further shortages are also allowed subject to full backlogging. The results have been elucidated with numerical examples.
Two-warehouse inventory model for deteriorating items when demand is price sensitive
International Journal of Operational …, 2010
The main objective of this article is to develop a two-warehouse inventory model for deteriorating items when demand is price sensitive. It is assumed that the units are transported under a bulk release pattern from Rented Warehouse to Own Warehouse and the deterioration rates of the items are different in the two warehouses. Further, the model jointly optimises the order quantity and selling price. Depending upon the optimal order quantity, decision is made whether to rent other warehouse. The optimal shipment policy is also provided if indeed the other warehouse is needed. The results have been validated with the help of a numerical example. Sensitivity analysis on the demand parameters is also performed. (2010) 'Two-warehouse inventory model for deteriorating items when demand is price sensitive', Int.
Optimal dynamic pricing and replenishment policies for deteriorating items
International Journal of Industrial Engineering Computations, 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 items. To reflect the dynamic characteristic of the problem, the selling price is defined as a time-dependent function of the initial selling price and the discount rate. In this regard, the price is exponentially discounted to compensate negative impact of the deterioration. The planning horizon is assumed to be infinite and the deterioration rate is time-dependent. In addition to price, the demand rate is dependent on advertisement as a powerful marketing tool. Several theoretical results and an iterative solution algorithm are developed to provide the optimal solution. Finally, to show validity of the model and illustrate the solution procedure, numerical results are presented.
Computers & Industrial Engineering, 2007
In this article, we consider an infinite horizon, single product economic order quantity where demand and deterioration rate are continuous and differentiable function of price and time, respectively. In addition, we allow for shortages and completely backlogged. The objective is to find the optimal inventory and pricing strategies maximizing the net present value of total profit over the infinite horizon. For any given selling price, we first prove that the optimal replenishment schedule not only exists but is unique. Next, we show that the total profit per unit time is a concave function of price when the replenishment schedule is given. We then provide a simple algorithm to find the optimal selling price and replenishment schedule for the proposed model. Finally, we use a couple of numerical examples to illustrate the algorithm.
An Inventory Model for Deteriorating Items with Stock Dependent Demand and Partial Backlogging
International Journal for Research in Applied Science and Engineering Technology (IJRASET) , 2021
In this paper, we formulate a deteriorating inventory model with stock-dependent demand Moreover, it is assumed that the shortages are allowed and partially backlogged, depending on the length of the waiting time for the next replenishment. The objective is to find the optimal replenishment to maximizing the total profit per unit time. We then provide a simple algorithm to find the optimal replenishment schedule for the proposed model. Finally, we use some numerical examples to illustrate the model.
Journal of Scientific Research, 2021
In this paper, a two warehouse inventory model for deteriorating items is studied with ramp type demand rate. Holding cost of rented warehouse has higher than the owned warehouse due to better preservation facilities in rented warehouse. Due to the improved services offer in rented warehouse, the deterioration rate in rented warehouse is less than deterioration rate in owned warehouse. When stock on hand is zero, the inventory manager offers a price discount to customers who are willing to backorder their demand. The study includes some features that are likely to be associated with certain types of inventory, like inventory of seasonal fruits and vegetables, newly launched fashion items, etc. The optimum ordering policy and the optimum discount offered for each backorder are determined by minimizing the total cost in a replenishment interval.