Managing inventory of Non-immediately degrading items with partial backlog and discounting cash flow under inflation

Abstract

Advertising is one of the most efficient methods of spreading the popularity of a product among clients of different demographics and socioeconomic backgrounds. The purpose of this work is to develop an inventory model for non-instantaneous deteriorating items with price and advertisement dependent demand under a suitable delay in payments. We used the discount cash flow method to create the model using the sale price and marketing cost over an indefinite planning horizon in inflationary environment. Throughout the cycle, the salvage value of deteriorating units is considered. Shortages that are partially backlogged are considered. The cycle duration and optimal ordering quantity solution are determined in this inventory model. The inventory model's critical parameters are subjected to numerical examples and sensitivity analysis. Following the sensitivity analysis, the management implications are discussed.