Abstract
Inventory management is becoming very challenging for the retailer over the years due to the uncertainty in the demand and supply of products in financial risk and management systems. In a competitive market, running a business smoothly in a highly suitable place is day by day becoming tough due to the very high fare for those locations. Thus, limited storage is available in those elite places with high fares, and a retailer takes a financial risk by stocking huge amounts of products in those limited storage stores. Thus, the appropriate financial analysis is required to find out optimal strategies (financial decisions) to sustain a business organization of electronic products in a global competitive business environment. As a result, when bulk purchases of electronic products, for example, T.V., Fridges, Oven, etc., have been made by the retailer, he faces two problems. The first one is related to the limited storage; as a result, he has to pay a considerable amount to hold the products for a long time. The second one is shortages of liquid money as he invested massive amounts. To avoid these problems, he offers some price discounts on the market’s original selling price to sell the products quickly for a limited time prior to recovering his capital investment. For that reason, a price, time, and stock dependent realistic demand function have been considered in this proposed paper with two modes of discount policy. The proposed model has been solved by a classical optimization technique from calculus and provides some insights for the retailer. Some numerical examples and graphs are provided to illustrate the model.
Highlights
Introduction and Literature ReviewInventory management is a technique that will provide benefits within the limited resources
This study mainly focused on four components of an electronic products supply chain
We have presented the discount policy so that it will reduce the risk of investment and help the manager recover the capital quickly, which is rare in prior studies
Summary
Inventory management is a technique that will provide benefits within the limited resources. The benefits of two warehouses depend on the fare and transportation facility, transportation cost, and suitable places for delivering products Sometimes all these issues demand more expenses than to sell the products at a marginal discount rate. Many studies have already been conducted on the benefits and disadvantages of discount policy (Ahn et al.2009; Bhaula et al 2019; Zhou 2012) Despite some facilities, it has some drawbacks if the business owner does not offer it with proper management. It has been often observed that the business owner chooses to discount the selling price (Md Mashud et al 2020) This discount sometimes depends on the stock of the products (Ahn et al 2009).
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