Abstract
This paper presents an inventory model with a constant rate of deterioration of the product, and shortages are allowed at the end of the cycle. The stock-dependent and price-sensitive demand have been considered with a policy of providing price discount to uplift the market demand. Preservation technology is applied to preserve the items from deterioration. The objective of this model is to maximize the total profit function by finding the optimal replenishment time, the optimal preservation technology investment and the optimal quantity. Next, we have shown that the total profit is a concave function of the replenishment time and preservation technology cost. Discount in pricing may be offered at a time of festival, season breaks down, lockdown and clearance of stock, before introducing a new product with up-gradations, etc. Numerical examples and graphical analysis are provided to explain the model. The discount policy could help any business organizations for smooth running of the business and obtain respective optimal profit.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
