Optimal dynamic pricing and replenishment policy for perishable items with inventory-level-dependent demand

Our focus in this paper is on determining an optimal replenishment policy for items with three-parameter Weibull distribution deterioration and inventory-level dependent demand. We developed and analyzed the model under the assumption of partial backlogging. The three-parameter Weibull hazard rate captures the impact of already deteriorated items that are received into the inventory, as well as those items that may start deteriorating in future. The inventory-level demand reflects a real market demand for product whose sales is enhanced by stock on display. We study a case base examples to gain some quantitative insight into the proposed model and we perform sensitivity analysis to draw some managerial implications.

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Optimal dynamic production and price for reliability-dependent imperfect production with inventory-level-dependent demand in uncertain environment

Journal of Uncertainty Analysis and Applications ◽

10.1186/2195-5468-2-9 ◽

2014 ◽

Vol 2 (1) ◽

Cited By ~ 1

Author(s):

Samar Hazari ◽

Kalipada Maity ◽

Jayanta Kumar Dey ◽

Samarjit Kar

Keyword(s):

Inventory Level ◽

Uncertain Environment ◽

Imperfect Production ◽

Optimal Dynamic ◽

Dependent Demand ◽

Dynamic Production

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Price-to-Quality Ratio Dependent Demand: Optimal Dynamic Pricing and Replenishment Period

2018 5th International Conference on Control, Decision and Information Technologies (CoDIT) ◽

10.1109/codit.2018.8394846 ◽

2018 ◽

Author(s):

Anna V. Kitaeva ◽

Natalia V. Stepanova ◽

Alexandra O. Zhukovskaya

Keyword(s):

Dynamic Pricing ◽

Optimal Dynamic ◽

Ratio Dependent ◽

Dependent Demand

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A Joint Dynamic Pricing, Advertising, and Production Model with Inventory-Level-Dependent Goodwill

Discrete Dynamics in Nature and Society ◽

10.1155/2020/9257380 ◽

2020 ◽

Vol 2020 ◽

pp. 1-15

Author(s):

Yongzhao Wang ◽

Liqun Wei ◽

Jianxiong Zhang

Keyword(s):

Dynamic Pricing ◽

Production Model ◽

Inventory Level ◽

System Parameters ◽

Decision Making Problem ◽

Demand Rate ◽

Building Factors ◽

Optimal Dynamic ◽

The Impact ◽

Production Decision

Inventory level has a significant impact on the goodwill of products to customers, which seldom becomes the focus of previous studies. In this paper, joint dynamic pricing, advertising, and production decision-making problem is investigated, where the demand rate depends on sales price and goodwill. The inventory and backlog as well as advertisement are considered as goodwill-building factors. The optimal dynamic pricing, advertising, and production policies are derived by using Pontryagin’s maximum principle. Numerical examples are provided to demonstrate the obtained results, and sensitivity analysis of main system parameters is carried out to obtain some managerial insights. We find that when the initial goodwill is relatively high, the firm’s profit first decreases and then increases with respect to the impact intensity of inventory on goodwill; otherwise, the firm always benefits from a higher impact intensity of inventory on goodwill. Furthermore, the optimal production and advertising policies are complementary caused by the feature of inventory-dependent goodwill.

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