A Single Period Production Inventory Model in Interval Environment with Price Revision

Abstract

In the present competitive market, in case of some products like smartphone, it is observed that after few days of launching a new product, a same type of product by some other company becomes available with a cheaper selling price or with more accessories within the same selling price. In this situation, customers normally go for the new product rejecting the older one. So always there is a possibility that some units of product remain unsold. This compels the company for a revision in selling price. This paper aims to develop such kind of production inventory models. Here demand of the product depends upon the selling price of the product, promotional effort and time. Now-a-days, specially for those kind of products, demand mainly depends on these three parameters in real life situation. When demand becomes zero, company sets a new selling price and the remaining products are depleted at a constant demand. So obviously it is going to be a single period inventory model. As a real life production process can not be hundred percent perfect, during the production process, some defective items are also produced which are reworked after the regular production process. Also, in order to reflect practical situation, inventory cost parameters are taken as interval numbers. As a result the corresponding optimization problem becomes interval valued which has been solved by using quantum-behaved particle swarm optimization technique. The main objective of this paper is to determine the optimal production run time that maximizes the total profit of the company.