Abstract
This paper aims to develop a dynamic pricing policy for deteriorating items with price and stock dependent demand. In declining market demand of items decreases with respect to time and also after a duration items get outdated. In this situation it needs a pricing policy to sale the items before end season. The proposed dynamic pricing policy is applicable for a limited period to clease the stock. Policy decision regarding the selling price could aggressively attracts the costumers. Objectives are to maximize the prot/revenue, pricing strategy and economic order level for such a stock dependent and price sensitive items. We are giving numerical example and simulation to illustrate the proposed model.
Highlights
Inventory management that maintains an adequate balance between demand and supply is an essential need for any business
Optimal profit and consumed quantity are very sensitive on parameter β which are increasing in terms of β increasing, higher initial demand is flexible to put higher selling price initially
In this paper we have developed a dynamic pricing policy and effect of parameters analyzed by computing the selling prices and respective output
Summary
Inventory management that maintains an adequate balance between demand and supply is an essential need for any business. The nature of items plays an important role in inventory management. The items, for this purpose, can be affected by and at the same time can affect several logistical and market forces like production, demand, transportation, price, etc. The life of items and the nature of deterioration of item characteristics play a very important role. Some inventory items are perishable over long duration of time, while some perish over small time interval. Inventory problem is affected by the inflation rate, shortage of items, order size, price fluctuations, discount strategies
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
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 call
