Optimal Policies for Price Sensitive Quadratic Demand with Preservation Technology Investment Under Inflationary Environment

2019 ◽  
Vol 18 (02) ◽  
pp. 325-337
Author(s):  
Azharuddin Shaikh ◽  
Poonam Mishra
Keyword(s):  
Selling Price ◽  
Defective Items ◽  
Technology Investment ◽  
Eoq Model ◽  
Preservation Technology ◽  
Realistic Situation ◽  
Suitable Amount ◽  
Total Profit ◽  
Quality Check ◽  
Preservation Technology Investment

The proposed EOQ model is a genuine attempt to manage retailer’s inventory when retailer’s stock is comprised of defective as well as constantly deteriorating items. Defective items in inventory are managed by selling them at discounted rate after a quality check process. Deterioration of items is controlled by investing suitable amount in preservation technology. The study assumes price sensitive quadratic demand incorporating the effect of inflation leading to a realistic situation. The objective of this paper is to maximize the retailer’s total profit with respect to cycle time, selling price, and preservation technology investment. Numerical examples are given to validate the model, and sensitivity analysis of inventory parameters is done to understand their effect. The outcome of this paper is applicable to goods like utility vehicles, stationary items, Fashion accessories, Cloths, Footwears, etc.

scholarly journals Retailer’s Joint Ordering, Pricing, and Preservation Technology Investment Policies for a Deteriorating Item under Permissible Delay in Payments

2018 ◽  
Vol 2018 ◽  
pp. 1-14 ◽  
Author(s):  
Umakanta Mishra ◽  
Jacobo Tijerina-Aguilera ◽  
Sunil Tiwari ◽  
Leopoldo Eduardo Cárdenas-Barrón
Keyword(s):  
Trade Credit ◽  
Optimal Solution ◽  
Inventory Model ◽  
Selling Price ◽  
Permissible Delay In Payments ◽  
Investment Policies ◽  
Technology Investment ◽  
Preservation Technology ◽  
Preservation Technology Investment ◽  
Delay In Payments

This article develops an inventory model for deteriorating items with controllable deterioration rate (by using preservation technology) under trade credit policy. As in practical scenarios the demand of an item is directly associated with its selling price, keeping this in mind, it is assumed to be a price dependent demand. The main objective of the inventory model is to determine jointly the optimal ordering, pricing, and preservation technology investment policies for retailer so that the total profit is maximized. The effects of key parameters on optimal solution are studied through a sensitivity analysis with the aim of examining the behavior of the inventory model with controllable deterioration under the permissible delay in payments.

scholarly journals An EOQ inventory model for deteriorating items with controllable deterioration rate under stock-dependent demand rate and non-linear holding cost

2021 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Shuhua Zhang ◽  
Longzhou Cao ◽  
Zuliang Lu
Keyword(s):  
Technology Investment ◽  
Reorder Point ◽  
Preservation Technology ◽  
Stock Dependent Demand ◽  
Demand Rate ◽  
Total Profit ◽  
Holding Cost ◽  
Preservation Technology Investment ◽  
Dependent Demand Rate ◽  
Dependent Demand

<p style='text-indent:20px;'>The main purpose of this paper is to investigate the retailer's strategy in selecting the order-up-to level, the reorder point and the preservation technology investment for deteriorating items, aiming to maximize his total profit per unit time. We formulate the problem into a mathematical model that takes into account stock-dependent demand rate, stock-dependent holding cost. The terminal conditions are relaxed to allow that the reorder point can be one of the following two cases: (1) <inline-formula><tex-math id="M1">\begin{document}$ N\leq0 $\end{document}</tex-math></inline-formula>, i.e., the reorder point may be negative or zero. When the reorder point is negative, the shortage is allowed and partial backlogged. (2) <inline-formula><tex-math id="M2">\begin{document}$ N\geq0 $\end{document}</tex-math></inline-formula>, i.e., the reorder point may be without shortage or zero. We prove the existence and uniqueness of the optimal order-up-to level, the reorder point and the preservation technology investment under any given two of them for both the two cases. We then present an algorithm to search for decision variables such that the total profit per unit time is maximized. Finally, numerical examples, comparisons in performance and sensitivity analysis are carried out to examine the results obtained. On the basis of the above results, some useful managerial insights are revealed.</p>

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 A Sustainable Inventory Model with Imperfect Products, Deterioration, and Controllable Emissions

Mathematics ◽  
2020 ◽  
Vol 8 (11) ◽  
pp. 2049
Author(s):  
Abu Hashan Md Mashud ◽  
Dipa Roy ◽  
Yosef Daryanto ◽  
Mohd Helmi Ali
Keyword(s):  
Product Quality ◽  
Co2 Reduction ◽  
Green Technology ◽  
Selling Price ◽  
Defective Items ◽  
Technology Investment ◽  
Deterioration Rate ◽  
Preservation Technology ◽  
Holding Cost ◽  
Carbon Dioxide Co2

Maintaining product quality and environmental performance are emerging concerns in modern competitive and transparent businesses. Many retailers separate perfect products from imperfect ones to ensure product quality and endeavor to achieve carbon dioxide (CO2) reduction through green technology investments and sustainable inventory planning. Product deterioration often badly hampers the retailing business; hence, suitable preservation technologies are used. In this study, we examined the optimization model of the selling price, investment, and replenishment planning to maximize the total profit. The proposed model considered the effect of a greater deterioration rate and discount price of imperfect products. Due to the high uncertainty in demand, a realistic holding cost was deliberated with a variable and constant part. Every time the retailer transports purchased items, greenhouse gases (GHGs), including CO2, are produced. Government regulations on CO2 minimization and customer awareness for greener products stimulate retailers to invest in energy-efficient green technology. This study simultaneously showed a harmonious relationship among the attributes of preservation technology, green technology investment, and discounts on defective items. Theoretical derivations were performed with numerical analysis.

scholarly journals Effect of Carbon-tax and Cap-and-trade mechanism on an inventory system with price-sensitive demand and preservation technology investment

2020 ◽  
Vol 30 (3) ◽  
pp. 361-380
Author(s):  
Aditi Khanna ◽  
Shikha Yadav ◽  
P Priyamvada
Keyword(s):  
Carbon Emissions ◽  
Carbon Tax ◽  
Sensitivity Analyses ◽  
Selling Price ◽  
Cap And Trade ◽  
Technology Investment ◽  
Preservation Technology ◽  
Total Profit ◽  
Inventory Holding ◽  
Carbon Control

In today's global decision-making context, government and organizations are highly concerned with environmental degradation caused by carbon emissions. Being environmental conscious, this paper investigates two different carbon policies viz., ?Carbon tax and Cap-and-trade mechanism". It is observed that the main sources of carbon emissions are transhipments, inventory holding, inventory deterioration, and its preservation. Demand for the item is considered to be selling price dependent. Further, a comparison between a ?carbon tax" and \cap-and-trade" policies has been illustrated. Some important managerial insights are obtained from numerical and sensitivity analyses. The present paper contributes to the existing literature of carbon control policies by developing optimal inventory models dealing with deteriorating items with preservation technology. Results suggest that firms should implement ?Cap-and-trade" policy to increase their total profit, which at the same time, will help in reducing the carbon emissions.

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