scholarly journals Retailer’s joint pricing model through an effective preservation strategy under a trade-credit policy

2021 ◽  
Author(s):  
Abu Hashan Md Mashud ◽  
Biswajit Sarkar
Keyword(s):  
Inventory Management ◽  
Trade Credit ◽  
Optimization Technique ◽  
Optimal Strategies ◽  
Preservation Technology ◽  
Sustainable Marketing ◽  
Total Profit ◽  
Joint Pricing ◽  
Theoretical Results ◽  
Actual Life

Sustainable inventory management is a common issue for any industry. This proposed study explains a representation of mathematical modelling for maintaining sustainability through the preservation technology for deteriorating products and trade-credit strategy for sustainable marketing. Based on the actual life circumstances, it is found that the demand for deteriorated products is influenced by the increasing frequency of advertising and preservation technology. The foremost aim of this study is to maintain sustainability with optimal pricing and optimal strategies to invest in preservation technology and optimal cycle length to take full advantage of the total profit. For solving the model, a classical optimization technique is utilized, and some theoretical results are shown with a graph of the profit function. Couples of experiments compare the proposed results and the existing literature and give some outcomes for different deterioration types. To illustrate and justify the model, a sensitivity analysis conceded for demonstrating the proposed model's flexibility by changing one parameter while keeping others fixed. The result shows that the trade-credit strategy under the preservation technology makes the management's most substantial marketing benefit.

scholarly journals A Discount Technique-Based Inventory Management on Electronics Products Supply Chain

2021 ◽  
Vol 14 (9) ◽  
pp. 398
Author(s):  
Md. Sujan Miah ◽  
Md. Mominul Islam ◽  
Mahmudul Hasan ◽  
Abu Hashan Md. Mashud ◽  
Dipa Roy ◽  
...  
Keyword(s):  
Inventory Management ◽  
Capital Investment ◽  
Financial Risk ◽  
Financial Analysis ◽  
Optimization Technique ◽  
Optimal Strategies ◽  
Business Environment ◽  
Selling Price ◽  
Electronic Products ◽  
Financial Decisions

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.

scholarly journals Joint pricing deteriorating inventory model considering product life cycle and advance payment with a discount facility

2020 ◽  
Author(s):  
Abu Hashan Md Mashud ◽  
Dipa Roy ◽  
Yosef Daryanto ◽  
H.M. Wee
Keyword(s):  
Life Cycle ◽  
Inventory Management ◽  
Product Life Cycle ◽  
Life Cycles ◽  
Inventory Model ◽  
Product Life ◽  
Advance Payment ◽  
Product Lifetime ◽  
Total Profit ◽  
Joint Pricing

The product life cycle of a deteriorating product is an important consideration in inventory management. This paper simultaneously investigates the optimum pricing and inventory decisions considering product life cycles under price-dependent demand and advance payment systems with a discount facility. A time-dependent holding cost is also introduced. The objective is to carefully balance the critical decision variables in order to maximize the total profit. Furthermore, the theoretical analysis validates the concavity of the profit function. A numerical example and sensitivity analysis are provided to show the characteristics of the model. The study shows that an advanced payment period, installment numbers, product’s maximum life cycle, purchasing cost and demand function significantly influence the total profit. This inventory model with a known product lifetime and advance payments can provide management insights to inventory manager in his/her strategic planning.

Optimal dynamic pricing, preservation technology investment and periodic ordering policies for agricultural products

2019 ◽  
Vol 53 (3) ◽  
pp. 731-747 ◽  
Author(s):  
Jing Lu ◽  
Jianxiong Zhang ◽  
Xinyun Jia ◽  
Guowei Zhu
Keyword(s):  
Inventory Management ◽  
Dynamic Pricing ◽  
Optimal Strategies ◽  
Solution Procedure ◽  
Agricultural Products ◽  
Pricing Policy ◽  
Technology Investment ◽  
Deterioration Rate ◽  
Preservation Technology ◽  
Preservation Technology Investment

This paper focuses on the inventory management of agricultural products, a specific type of perishable items carrying the deterioration property. In practice, the deterioration rate of agricultural products is varying with time and can be slowed downviainvesting in the preservation technology. This objective of this paper is to maximize the firm’s total profit per unit time by simultaneously determining dynamic pricing, replenishment cycle length, replenishment quantity and preservation technology investment. We first derive pricing policy by solving a dynamic optimization problem and then propose a solution procedure to obtain the optimal strategies that maximize profit. Furthermore, numerical examples and sensitivity analysis are conducted to gain more managerial insights. We find that the firm should take a penetration pricing policy. In addition, if the shelf life of products is very long, the firm should not take preservation technology investment. When the unit holding cost is relatively small or the unit purchasing cost is relatively large, the firm should increase preservation technology investment.

Non-instantaneous deteriorating inventory model under the joined effect of trade-credit, preservation technology and advertisement policy

Kybernetes ◽  
2019 ◽  
Vol 49 (6) ◽  
pp. 1645-1674 ◽  
Author(s):  
Abu Hashan Md Mashud ◽  
Md. Rakibul Hasan ◽  
Hui Ming Wee ◽  
Yosef Daryanto
Keyword(s):  
Trade Credit ◽  
Optimization Technique ◽  
Inventory Model ◽  
Sensitivity Analyses ◽  
Selling Price ◽  
Content Type ◽  
Technology Investment ◽  
Deterioration Rate ◽  
Preservation Technology ◽  
Preservation Technology Investment

Purpose This paper aims to simultaneously consider an inventory model with price and advertisement dependent demand, non-instantaneous deterioration rate with preservation technology investment, partially backlogged shortages and trade credit. Design/methodology/approach This model considered a non-instantaneous deterioration, which starts after a certain storage period with a constant rate. The proposed model focused on two things. The first one is to reduce the deterioration rate by preservation technology investment, and the second one is using an appropriate trade credit period to maximize the total profit. The classical optimization technique is used to solve the problem. Findings The authors found that trade credit, advertising cost, preservation technology affect the total cost and selling price is one of the most important decision variables affecting the model. Practical implications This study provides a reference for a manufacturer and a retailer on making inventory decisions under different pricing, advertisement expense, preservation technology investment and credit strategies. Four cases are presented to illustrate the inventory model. Sensitivity analyses are performed to gain managerial insights for decision-making. Originality/value The study simultaneously considers a non-instantaneous deterioration inventory model, trade-credit, and preservation technology and advertisement policy. From our literature search, no researcher has undergone this type of study.

scholarly journals Sustainable Inventory Management for Environmental Impact through Partial Backordering and Multi-Trade-Credit-Period

2018 ◽  
Vol 10 (12) ◽  
pp. 4761 ◽  
Author(s):  
Biswajit Sarkar ◽  
Waqas Ahmed ◽  
Seok-Beom Choi ◽  
Muhammad Tayyab
Keyword(s):  
Environmental Impact ◽  
Inventory Management ◽  
Trade Credit ◽  
Global Business ◽  
Numerical Illustration ◽  
Defective Items ◽  
Credit Period ◽  
Partial Backordering ◽  
Imperfect Items ◽  
Total Profit

Incorporation of sustainable management for the rework of defective items brings long lasting benefits. In global business, there are situations when the products are procured from a global supplier. There are chances that the received lot may contain a fraction of imperfect products. These imperfect products are still valuable and can be repairable to save the environment. It is sustainable to repair imperfect items in a local repair store as compared to sending it back to the supplier. The cost of carbon emissions is also incorporated in the function to incorporate the environmental impact on total profit. Meanwhile, the supplier also offers a multi-trade-credit-period to the buyer. The developed model is sustainable and reduces the environmental impact as well as benefits for interim financing. This paper has an objective to maximize the total profit by developing a synergic economic order quantity model by considering multi-trade-credit policy, rework, and shortages simultaneously. This model can help in making decisions to enhance the performance of sustainable inventory management by controlling the cycle time and a fraction of time for a global supply chain. A non-derivative approach is employed to develop a closed-form optimal result. The numerical illustration with sensitivity analysis is also drawn to provide managerial insights into real practices.

scholarly journals Control of Non-instantaneous Degrading Inventory under Trade Credit and Partial Backlogging

2021 ◽  
Vol 4 (3) ◽  
pp. 122-141
Author(s):  
Pooja Meena ◽  
◽  
Anil Kumar Sharma ◽  
Ganesh Kumar ◽  
◽  
...  
Keyword(s):  
Sensitivity Analysis ◽  
Inventory Management ◽  
Trade Credit ◽  
Reduction Rate ◽  
Inventory System ◽  
Partial Backlogging ◽  
Usual Practice ◽  
Numerical Examples ◽  
Credit Term ◽  
Total Profit

Inventory management is an extremely difficult task. It has become usual practice for a provider during the last few decades to provide a retailer with a credit term. In this article, a non-instantly degradable products inventory system is built with a price-sensitive demand and a Weibull credit term allocation reduction rate. Some backlogged deficiencies are permitted. The aim is to maximize the total profit in this study by taking three cases into account. Numerical examples, graphical representations and sensitivity analysis demonstrate the application of the approach developed in this study.

scholarly journals The Role of the Discount Policy of Prepayment on Environmentally Friendly Inventory Management

2022 ◽  
Vol 6 (1) ◽  
pp. 26
Author(s):  
Shirin Sultana ◽  
Abu Hashan Md Mashud ◽  
Yosef Daryanto ◽  
Sujan Miah ◽  
Adel Alrasheedi ◽  
...  
Keyword(s):  
Inventory Management ◽  
Emission Reduction ◽  
Carbon Emission ◽  
Positive Impact ◽  
Environmentally Friendly ◽  
Selling Price ◽  
Business Systems ◽  
Carbon Emission Reduction ◽  
Demand Rate ◽  
Total Profit

Nowadays, more and more consumers consider environmentally friendly products in their purchasing decisions. Companies need to adapt to these changes while paying attention to standard business systems such as payment terms. The purpose of this study is to optimize the entire profit function of a retailer and to find the optimal selling price and replenishment cycle when the demand rate depends on the price and carbon emission reduction level. This study investigates an economic order quantity model that has a demand function with a positive impact of carbon emission reduction besides the selling price. In this model, the supplier requests payment in advance on the purchased cost while offering a discount according to the payment in the advanced decision. Three different types of payment-in-advance cases are applied: (1) payment in advance with equal numbers of instalments, (2) payment in advance with a single instalment, and (3) the absence of payment in advance. Numerical examples and sensitivity analysis illustrate the proposed model. Here, the total profit increases for all three cases with higher values of carbon emission reduction level. Further, the study finds that the profit becomes maximum for case 2, whereas the selling price and cycle length become minimum. This study considers the sustainable inventory model with payment-in-advance settings when the demand rate depends on the price and carbon emission reduction level. From the literature review, no researcher has undergone this kind of study in the authors’ knowledge.

scholarly journals Inventory Modeling for Deteriorating Imperfect Quality Items with Selling Price Dependent Demand and Shortage Backordering under Credit Financing

2017 ◽  
Vol 2 (2) ◽  
pp. 110-124 ◽  
Author(s):  
Aditi Khanna ◽  
Prerna Gautam ◽  
Chandra K. Chandra K.
Keyword(s):  
Trade Credit ◽  
Optimal Order ◽  
Manufacturing Processes ◽  
Selling Price ◽  
Imperfect Quality ◽  
Inspection Process ◽  
Total Profit ◽  
Credit Financing ◽  
Fierce Competition ◽  
Dependent Demand

The production processes throughout the world aim at improving quality by introducing latest technologies so as to perform well in fierce competition. Despite this due to various unavoidable factors, most of the manufacturing processes end up with certain imperfections. Hence, all the items produced are not of perfect quality. The condition tends to be more susceptible while dealing with items of deteriorating quality; therefore an inspection process is must for screening good quality items from the ordered lot. Demand is assumed to be price dependent and it is represented by a constant price elasticity function. Also to endure with the rapid growth and turbulent markets, the suppliers try to engage and attract retailers through various gimmicks and one such contrivance is offering trade credit, which is proved to be an influential strategy for attracting new customers. In view of this, the present paper develops an inventory model for items of imperfect quality with deterioration under trade-credit policies with price dependent demand. Shortages are allowed and fully backlogged. A mathematical model is developed to depict this scenario. The aim of the study is to optimize the optimal order level, backorder level and selling price so as to maximize the retailer’s total profit. Findings are validated quantitatively by using numerical analysis. Sensitivity analysis is also performed so as to cater some important decision-making insights.

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