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Joint pricing and replenishment policy for deteriorating inventory with declining market

โœ Scribed by Hui-Ming Wee

Publisher
Elsevier Science
Year
1995
Tongue
English
Weight
664 KB
Volume
40
Category
Article
ISSN
0925-5273

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โœฆ Synopsis

This study deals with a deteriorating inventory model where demand decreases linearly with time and cost of items. Planning horizon is assumed to be finite, the replenishment cycles are constant and shortages are partially back-ordered.

The net profit maximizing ordering policy and price are determined for different degree of partial back-ordering. The reduction in revenue resulted from lost sale is expressed in the lost sale shortage penalty in the total cost formulation. A solution method based on nonlinear programming code and the Hessian matrix guarantees global optimality of the solution. A numerical example is provided to illustrate the theory.

๐Ÿ“œ SIMILAR VOLUMES

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Joint pricing and ordering policy for exponentially decaying inventory with known demand
โœ Morris A. Cohen ๐Ÿ“‚ Article ๐Ÿ“… 1977 ๐Ÿ› John Wiley and Sons ๐ŸŒ English โš– 614 KB

## Abstract This paper is concerned with the problem of simultaneously setting price and production levels for an exponentially decaying product. Such products suffer a loss in utility which is proportional to the total quantity of stock on hand. A continuous review, deterministic demand model is c