When a supplier announces a price increase at a certain time in the future, for each retailer it is important to choose whether to purchase supplementary stock to take benefit of the current lower price or procure at a new price. This article focuses on the possible effects of price increase on a retailer’s replenishment strategy for constant deterioration of items. Here, quadratic demand is debated; which is appropriate for the products for which demand increases initially and subsequently it starts to decrease with the new version of the substitute. We discuss two scenarios in this study: (I) when the special order time coincides with the retailer’s replenishment time and (II) when the special order time falls during the retailer’s sales period. We determine an optimal ordering policy for each case by maximizing total cost savings between special and regular orders during the depletion time of the special order quantity. Scenarios are established and illustrated with numerical examples. Through, sensitivity analysis important inventory parameters are classified. Graphical results, in two and three dimensions, are exhibited with supervisory decision.

Vendor managed inventory system is vendor centric inventory system in which all inventory decisions are taken by vendor rather than buyer. This study considers non-instantaneous deteriorating items with generalized type time dependent deterioration rate when demand rate is quadratic function of time and shortages are allowed with partial backlogging. The paper aims to compare traditional inventory system and vendor managed inventory system by analyzing total cost function. To validate the model, numerical example and sensitivity analysis are performed. The analysis shows that vendor managed inventory is more beneficial compare with the traditional inventory system.