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Pricing Policy in an Inventory Model with Green Level Dependent Demand for a Deteriorating Item

Author

Listed:
  • Md. Abdul Hakim

    (Department of Mathematics, Comilla University, Cumilla 3506, Bangladesh)

  • Ibrahim M. Hezam

    (Department of Statistics & Operations Research, College of Sciences, King Saud University, Riyadh 11451, Saudi Arabia)

  • Adel Fahad Alrasheedi

    (Department of Statistics & Operations Research, College of Sciences, King Saud University, Riyadh 11451, Saudi Arabia)

  • Jeonghwan Gwak

    (Department of Software, Korea National University of Transportation, Chungju 27469, Korea
    Department of Biomedical Engineering, Korea National University of Transportation, Chungju 27469, Korea
    Department of AI Robotics Engineering, Korea National University of Transportation, Chungju 27469, Korea
    Department of IT & Energy Convergence (BK21 FOUR), Korea National University of Transportation, Chungju 27469, Korea)

Abstract

The goal of this research is to investigate an inventory model for degrading commodities with linear selling prices and nonlinear green level-dependent demand for an item. The pre-payment option with a one-time flat reduction on the product’s selling price is considered here. The governing differential equations are used to mathematically define the model and solve numerically to optimize the model’s average profit. After that, the model is tested using a numerical example, and sensitivity analyses are run to see how changing inventory factors affects the best strategy. The concavity of the objective function is shown graphically with the help of MATLAB software. Finally, some applications of this approach and future scopes are discussed.

Suggested Citation

  • Md. Abdul Hakim & Ibrahim M. Hezam & Adel Fahad Alrasheedi & Jeonghwan Gwak, 2022. "Pricing Policy in an Inventory Model with Green Level Dependent Demand for a Deteriorating Item," Sustainability, MDPI, vol. 14(8), pages 1-16, April.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:8:p:4646-:d:793055
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    References listed on IDEAS

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