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Time-dependent demand and utility-sensitive sale price in a retailing system

Author

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  • Afshar-Nadjafi, Behrouz
  • Mashatzadeghan, Hamidreza
  • Khamseh, Alireza

Abstract

In this paper, we address a variation of economic order quantity model where product has an expiration date and its demand is a descending function of product's lifetime. In addition, sale price of product is considered as a descending function of the product's lifetime which is derived from its continuous utility deterioration. This model is useful for retailing managers in dealing with perishable goods such as vegetables, fruits, etc. Because of the parameters-dependent structure of the developed model, the closed form of the optimal ordering policy may not be derived. General optimization on the objective function can be done by any mathematical optimization software or numerical methods. Effectiveness of the proposed model is presented through several numerical examples and sensitivity of the key parameters of the model is analyzed.

Suggested Citation

  • Afshar-Nadjafi, Behrouz & Mashatzadeghan, Hamidreza & Khamseh, Alireza, 2016. "Time-dependent demand and utility-sensitive sale price in a retailing system," Journal of Retailing and Consumer Services, Elsevier, vol. 32(C), pages 171-174.
    • Handle: RePEc:eee:joreco:v:32:y:2016:i:c:p:171-174
    DOI: 10.1016/j.jretconser.2016.06.011
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    References listed on IDEAS

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    1. Afshar-Nadjafi, Behrouz, 2016. "The influence of sale announcement on the optimal policy of an inventory system with perishable items," Journal of Retailing and Consumer Services, Elsevier, vol. 31(C), pages 239-245.
    2. Avinadav, Tal & Herbon, Avi & Spiegel, Uriel, 2013. "Optimal inventory policy for a perishable item with demand function sensitive to price and time," International Journal of Production Economics, Elsevier, vol. 144(2), pages 497-506.
    3. Wu, Jiang & Chan, Ya-Lan, 2014. "Lot-sizing policies for deteriorating items with expiration dates and partial trade credit to credit-risk customers," International Journal of Production Economics, Elsevier, vol. 155(C), pages 292-301.
    4. 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.
    5. P., Vijaya Laxmi & M.L., Soujanya, 2015. "Perishable inventory system with service interruptions, retrial demands and negative customers," Applied Mathematics and Computation, Elsevier, vol. 262(C), pages 102-110.
    6. Zhao, Yingxue & Choi, Tsan-Ming & Cheng, T.C.E. & Sethi, Suresh P. & Wang, Shouyang, 2014. "Buyback contracts with price-dependent demands: Effects of demand uncertainty," European Journal of Operational Research, Elsevier, vol. 239(3), pages 663-673.
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    Cited by:

    1. Saha, Subrata & Chatterjee, Debajyoti & Sarkar, Biswajit, 2021. "The ramification of dynamic investment on the promotion and preservation technology for inventory management through a modified flower pollination algorithm," Journal of Retailing and Consumer Services, Elsevier, vol. 58(C).

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