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A note on “optimal replenishment policies for non-instantaneous deteriorating items with price and stock sensitive demand under permissible delay in payment”

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  • Wu, Jiang
  • Skouri, Konstantina
  • Teng, Jinn-Tsair
  • Ouyang, Liang-Yuh

Abstract

Soni 2013. Int. J. Prod. Econ., 146 (1), 259–268 proposed optimal replenishment policies for non-instantaneous deteriorating items (i.e., the product starts deteriorating after a period of no-deterioration) with price and stock sensitive demand. With a stock-dependent demand, it is desirable to have non-zero ending inventory due to potential profit resulting from the increased demand. However, Soni 2013. Int. J. Prod. Econ., 146 (1), 259–268 treated those ending inventory as fresh stocks to go through another period of non-deterioration again. Additionally, he assumed for simplicity that the replenishment cycle time T must be longer than the period of non-deterioration td(i.e., T>td). In reality, one should consider all possible replenishment cycle time to maximize the profit. In this note, we complement the shortcomings of his model by (i) selling those ending inventory as salvages, and (ii) considering all possible replenishment cycle time, which may be shorter than the period of non-deterioration. With these modifications the repeatability of the replenishment cycle is ensured and the applicability of Soni′s model is strengthened. The numerical examples indicate that the global optimal solution is indeed possible in the case of T≤td.

Suggested Citation

  • Wu, Jiang & Skouri, Konstantina & Teng, Jinn-Tsair & Ouyang, Liang-Yuh, 2014. "A note on “optimal replenishment policies for non-instantaneous deteriorating items with price and stock sensitive demand under permissible delay in payment”," International Journal of Production Economics, Elsevier, vol. 155(C), pages 324-329.
    • Handle: RePEc:eee:proeco:v:155:y:2014:i:c:p:324-329
    DOI: 10.1016/j.ijpe.2013.12.017
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    References listed on IDEAS

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    4. Li, Guiping & He, Xiuli & Zhou, Jing & Wu, Hao, 2019. "Pricing, replenishment and preservation technology investment decisions for non-instantaneous deteriorating items," Omega, Elsevier, vol. 84(C), pages 114-126.
    5. Feng, Lin & Chan, Ya-Lan, 2019. "Joint pricing and production decisions for new products with learning curve effects under upstream and downstream trade credits," European Journal of Operational Research, Elsevier, vol. 272(3), pages 905-913.
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    7. Luis A. San-José & Joaquín Sicilia & Manuel González-De-la-Rosa & Jaime Febles-Acosta, 2020. "Best pricing and optimal policy for an inventory system under time-and-price-dependent demand and backordering," Annals of Operations Research, Springer, vol. 286(1), pages 351-369, March.
    8. 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.
    9. Saha, S. & Goyal, S.K., 2015. "Supply chain coordination contracts with inventory level and retail price dependent demand," International Journal of Production Economics, Elsevier, vol. 161(C), pages 140-152.
    10. Luis A. San-José & Joaquín Sicilia & Manuel González-de-la-Rosa & Jaime Febles-Acosta, 2021. "Optimal Price and Lot Size for an EOQ Model with Full Backordering under Power Price and Time Dependent Demand," Mathematics, MDPI, vol. 9(16), pages 1-16, August.
    11. 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.
    12. Pan, Qin-hua & He, Xiuli & Skouri, Konstantina & Chen, Sheng-Chih & Teng, Jinn-Tsair, 2018. "An inventory replenishment system with two inventory-based substitutable products," International Journal of Production Economics, Elsevier, vol. 204(C), pages 135-147.
    13. Fauza, Gusti & Amer, Yousef & Lee, Sang-Heon & Prasetyo, Hari, 2016. "An integrated single-vendor multi-buyer production-inventory policy for food products incorporating quality degradation," International Journal of Production Economics, Elsevier, vol. 182(C), pages 409-417.
    14. Feng, Lin & Chan, Ya-Lan & Cárdenas-Barrón, Leopoldo Eduardo, 2017. "Pricing and lot-sizing polices for perishable goods when the demand depends on selling price, displayed stocks, and expiration date," International Journal of Production Economics, Elsevier, vol. 185(C), pages 11-20.

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