Optimal ordering and pricing policy for price sensitive stock–dependent demand under progressive payment scheme

Shah, N.; Patel, A.; Lou, K.

Growing Science » International Journal of Industrial Engineering Computations » Optimal ordering and pricing policy for price sensitive stock–dependent demand under progressive payment scheme

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International Journal of Industrial Engineering Computations

ISSN 1923-2934 (Online) - ISSN 1923-2926 (Print) Quarterly Publication Volume 2 Issue 3 pp. 523-532 , 2011

Optimal ordering and pricing policy for price sensitive stock–dependent demand under progressive payment scheme Pages 523-532 Download PDF

Authors: Nita H. Shah, Amisha R. Patel, Kuo-Ren Lou

DOI: 10.5267/j.ijiec.2011.03.005

Keywords: Deterioration, Inventory, Price-sensitive stock-dependent demand

Abstract: The terminal condition of inventory level to be zero at the end of the cycle time adopted by Soni and Shah (2008, 2009) is not viable when demand is stock-dependent. To rectify this assumption, we extend their model for (1) an ending – inventory to be non-zero; (2) limited floor space; (3) a profit maximization model; (4) selling price to be a decision variable, and (5) units in inventory deteriorate at a constant rate. The algorithm is developed to search for the optimal decision policy. The working of the proposed model is supported with a numerical example. Sensitivity analysis is carried out to investigate critical parameters.

How to cite this paper

 Shah, N., Patel, A & Lou, K. (2011). Optimal ordering and pricing policy for price sensitive stock–dependent demand under progressive payment scheme.International Journal of Industrial Engineering Computations , 2(3), 523-532.

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