IDEAS home Printed from https://ideas.repec.org/a/eee/jomega/v41y2013i2p421-430.html
   My bibliography  Save this article

Optimizing inventory and marketing policy for non-instantaneous deteriorating items with generalized type deterioration and holding cost rates

Author

Listed:
  • Shah, Nita H
  • Soni, Hardik N
  • Patel, Kamlesh A

Abstract

This paper considers an inventory system with non-instantaneous deteriorating item in which demand rate is a function of advertisement of an item and selling price. This paper aids the retailer in maximizing the total profit by determining optimal inventory and marketing parameters. In contrast to previous inventory models, an arbitrary holding cost rate and arbitrary deterioration rate have been incorporated to provide general framework to the model. First, a mathematical model is formulated and then some useful theoretical results have been framed to characterize the optimal solutions. The necessary and sufficient conditions for the existence and uniqueness of the optimal solutions are also derived. An algorithm is designed to find the optimum solutions of the proposed model. Numerical examples are included to illustrate the algorithmic procedure and the effects of key parameters are studied to analyze the behavior of the model.

Suggested Citation

  • Shah, Nita H & Soni, Hardik N & Patel, Kamlesh A, 2013. "Optimizing inventory and marketing policy for non-instantaneous deteriorating items with generalized type deterioration and holding cost rates," Omega, Elsevier, vol. 41(2), pages 421-430.
    • Handle: RePEc:eee:jomega:v:41:y:2013:i:2:p:421-430
    DOI: 10.1016/j.omega.2012.03.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305048312000564
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.omega.2012.03.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jörnsten, Kurt & Lise Nonås, Sigrid & Sandal, Leif & Ubøe, Jan, 2012. "Transfer of risk in the newsvendor model with discrete demand," Omega, Elsevier, vol. 40(3), pages 404-414.
    2. Yang, Shilei & Shi, Chunming Victor & Zhao, Xuan, 2011. "Optimal ordering and pricing decisions for a target oriented newsvendor," Omega, Elsevier, vol. 39(1), pages 110-115, January.
    3. Wu, Kun-Shan & Ouyang, Liang-Yuh & Yang, Chih-Te, 2006. "An optimal replenishment policy for non-instantaneous deteriorating items with stock-dependent demand and partial backlogging," International Journal of Production Economics, Elsevier, vol. 101(2), pages 369-384, June.
    4. Arcelus, F.J. & Kumar, Satyendra & Srinivasan, G., 2012. "Risk tolerance and a retailer's pricing and ordering policies within a newsvendor framework," Omega, Elsevier, vol. 40(2), pages 188-198, April.
    5. Deane, Jason & Agarwal, Anurag, 2012. "Scheduling online advertisements to maximize revenue under variable display frequency," Omega, Elsevier, vol. 40(5), pages 562-570.
    6. Weiss, Howard J., 1982. "Economic order quantity models with nonlinear holding costs," European Journal of Operational Research, Elsevier, vol. 9(1), pages 56-60, January.
    7. Goyal, S. K. & Giri, B. C., 2001. "Recent trends in modeling of deteriorating inventory," European Journal of Operational Research, Elsevier, vol. 134(1), pages 1-16, October.
    8. Goh, M., 1994. "EOQ models with general demand and holding cost functions," European Journal of Operational Research, Elsevier, vol. 73(1), pages 50-54, February.
    9. Kim, DaeSoo & Lee, Won J., 1998. "Optimal joint pricing and lot sizing with fixed and variable capacity," European Journal of Operational Research, Elsevier, vol. 109(1), pages 212-227, August.
    10. Alfares, Hesham K., 2007. "Inventory model with stock-level dependent demand rate and variable holding cost," International Journal of Production Economics, Elsevier, vol. 108(1-2), pages 259-265, July.
    11. Dye, Chung-Yuan, 2007. "Joint pricing and ordering policy for a deteriorating inventory with partial backlogging," Omega, Elsevier, vol. 35(2), pages 184-189, April.
    12. Chang, Horng-Jinh & Teng, Jinn-Tsair & Ouyang, Liang-Yuh & Dye, Chung-Yuan, 2006. "Retailer's optimal pricing and lot-sizing policies for deteriorating items with partial backlogging," European Journal of Operational Research, Elsevier, vol. 168(1), pages 51-64, January.
    13. Maihami, Reza & Nakhai Kamalabadi, Isa, 2012. "Joint pricing and inventory control for non-instantaneous deteriorating items with partial backlogging and time and price dependent demand," International Journal of Production Economics, Elsevier, vol. 136(1), pages 116-122.
    14. Dye, Chung-Yuan & Chang, Horng-Jinh & Teng, Jinn-Tsair, 2006. "A deteriorating inventory model with time-varying demand and shortage-dependent partial backlogging," European Journal of Operational Research, Elsevier, vol. 172(2), pages 417-429, July.
    15. Kim, Sang-Won & Bell, Peter C., 2011. "Optimal pricing and production decisions in the presence of symmetrical and asymmetrical substitution," Omega, Elsevier, vol. 39(5), pages 528-538, October.
    16. Khouja, Moutaz, 2006. "A joint optimal pricing, rebate value, and lot sizing model," European Journal of Operational Research, Elsevier, vol. 174(2), pages 706-723, October.
    17. Banerjee, Pradeep K. & Turner, T. Rolf, 2012. "A flexible model for the pricing of perishable assets," Omega, Elsevier, vol. 40(5), pages 533-540.
    18. Muhlemann, A. P. & Valtis-Spanopoulos, N. P., 1980. "A variable holding cost rate EOQ model," European Journal of Operational Research, Elsevier, vol. 4(2), pages 132-135, February.
    19. Goyal, S.K., 1987. "Economic ordering policy for deteriorating items over an infinite time horizon," European Journal of Operational Research, Elsevier, vol. 28(3), pages 298-301, March.
    20. P. L. Abad, 1996. "Optimal Pricing and Lot-Sizing Under Conditions of Perishability and Partial Backordering," Management Science, INFORMS, vol. 42(8), pages 1093-1104, August.
    21. Musa, Abubakar & Sani, Babangida, 2012. "Inventory ordering policies of delayed deteriorating items under permissible delay in payments," International Journal of Production Economics, Elsevier, vol. 136(1), pages 75-83.
    22. Abad, P. L., 1994. "Supplier pricing and lot sizing when demand is price sensitive," European Journal of Operational Research, Elsevier, vol. 78(3), pages 334-354, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Reza Maihami & Behrooz Karimi & Seyyed Mohammad Taghi Fatemi Ghomi, 2017. "Effect of two-echelon trade credit on pricing-inventory policy of non-instantaneous deteriorating products with probabilistic demand and deterioration functions," Annals of Operations Research, Springer, vol. 257(1), pages 237-273, October.
    2. Qin, Yiyan & Wang, Jianjun & Wei, Caimin, 2014. "Joint pricing and inventory control for fresh produce and foods with quality and physical quantity deteriorating simultaneously," International Journal of Production Economics, Elsevier, vol. 152(C), pages 42-48.
    3. Maryam Ghoreishi & Gerhard-Wilhelm Weber & Abolfazl Mirzazadeh, 2015. "An inventory model for non-instantaneous deteriorating items with partial backlogging, permissible delay in payments, inflation- and selling price-dependent demand and customer returns," Annals of Operations Research, Springer, vol. 226(1), pages 221-238, March.
    4. Dye, Chung-Yuan, 2013. "The effect of preservation technology investment on a non-instantaneous deteriorating inventory model," Omega, Elsevier, vol. 41(5), pages 872-880.
    5. Bakker, Monique & Riezebos, Jan & Teunter, Ruud H., 2012. "Review of inventory systems with deterioration since 2001," European Journal of Operational Research, Elsevier, vol. 221(2), pages 275-284.
    6. Chih-Te Yang & Liang-Yuh Ouyang & Kun-Shan Wu & Hsiu-Feng Yen, 2011. "An optimal replenishment policy for deteriorating items with stock-dependent demand and relaxed terminal conditions under limited storage space," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 19(1), pages 139-153, March.
    7. Pentico, David W. & Drake, Matthew J., 2011. "A survey of deterministic models for the EOQ and EPQ with partial backordering," European Journal of Operational Research, Elsevier, vol. 214(2), pages 179-198, October.
    8. Maihami, Reza & Nakhai Kamalabadi, Isa, 2012. "Joint pricing and inventory control for non-instantaneous deteriorating items with partial backlogging and time and price dependent demand," International Journal of Production Economics, Elsevier, vol. 136(1), pages 116-122.
    9. Pando, Valentín & San-José, Luis A. & García-Laguna, Juan & Sicilia, Joaquín, 2013. "A newsboy problem with an emergency order under a general backorder rate function," Omega, Elsevier, vol. 41(6), pages 1020-1028.
    10. Zhang, Jianxiong & Wang, Yu & Lu, Lihao & Tang, Wansheng, 2015. "Optimal dynamic pricing and replenishment cycle for non-instantaneous deterioration items with inventory-level-dependent demand," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 136-145.
    11. Avinadav, Tal & Herbon, Avi & Spiegel, Uriel, 2014. "Optimal ordering and pricing policy for demand functions that are separable into price and inventory age," International Journal of Production Economics, Elsevier, vol. 155(C), pages 406-417.
    12. M. Palanivel & R. Uthayakumar, 2015. "Finite horizon EOQ model for non-instantaneous deteriorating items with price and advertisement dependent demand and partial backlogging under inflation," International Journal of Systems Science, Taylor & Francis Journals, vol. 46(10), pages 1762-1773, July.
    13. Madhukar Nagare & Pankaj Dutta & Pravin Suryawanshi, 2020. "Optimal procurement and discount pricing for single-period non-instantaneous deteriorating products with promotional efforts," Operational Research, Springer, vol. 20(1), pages 89-117, March.
    14. San-José, L.A. & Sicilia, J. & García-Laguna, J., 2015. "Analysis of an EOQ inventory model with partial backordering and non-linear unit holding cost," Omega, Elsevier, vol. 54(C), pages 147-157.
    15. Zeinab Sazvar & Mohammad Reza Akbari Jokar & Armand Baboli, 2014. "A new order splitting model with stochastic lead times for deterioration items," International Journal of Systems Science, Taylor & Francis Journals, vol. 45(9), pages 1936-1954, September.
    16. Janssen, Larissa & Claus, Thorsten & Sauer, Jürgen, 2016. "Literature review of deteriorating inventory models by key topics from 2012 to 2015," International Journal of Production Economics, Elsevier, vol. 182(C), pages 86-112.
    17. Sarkar, Biswajit & Sarkar, Sumon, 2013. "Variable deterioration and demand—An inventory model," Economic Modelling, Elsevier, vol. 31(C), pages 548-556.
    18. Roya Tat & Ata Allah Taleizadeh & Maryam Esmaeili, 2015. "Developing economic order quantity model for non-instantaneous deteriorating items in vendor-managed inventory (VMI) system," International Journal of Systems Science, Taylor & Francis Journals, vol. 46(7), pages 1257-1268, May.
    19. Wang, Chuanxu & Huang, Rongbing & Wei, Qianli, 2015. "Integrated pricing and lot-sizing decision in a two-echelon supply chain with a finite production rate," International Journal of Production Economics, Elsevier, vol. 161(C), pages 44-53.
    20. Yang, Chih-Te, 2014. "An inventory model with both stock-dependent demand rate and stock-dependent holding cost rate," International Journal of Production Economics, Elsevier, vol. 155(C), pages 214-221.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:41:y:2013:i:2:p:421-430. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.