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An EOQ model for perishable products with discounted selling price and stock dependent demand

Author

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  • S. Panda

    ()

  • S. Saha
  • M. Basu

Abstract

A single item economic order quantity model is considered in which the demand is stock dependent. After a certain time the product starts to deteriorate and due to visualization effect and other aspects of deterioration the demand becomes constant. In that situation a discount on selling price provides significant increment in demand rate. In this paper we investigate how much discount on selling price may be given during deterioration to maximize the profit per unit time and whether a pre-deterioration discount affects the unit profit or not. A mathematical model is developed incorporating both pre- and post deterioration discounts on unit selling price, where analytical results reveal some important characteristics of discount structure. A numerical example is presented and sensitivity analysis of the model is carried out. Copyright Springer-Verlag 2009

Suggested Citation

  • S. Panda & S. Saha & M. Basu, 2009. "An EOQ model for perishable products with discounted selling price and stock dependent demand," 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. 17(1), pages 31-53, March.
  • Handle: RePEc:spr:cejnor:v:17:y:2009:i:1:p:31-53
    DOI: 10.1007/s10100-008-0073-z
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    References listed on IDEAS

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    1. 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.
    2. Pal, S. & Goswami, A. & Chaudhuri, K. S., 1993. "A deterministic inventory model for deteriorating items with stock-dependent demand rate," International Journal of Production Economics, Elsevier, vol. 32(3), pages 291-299, November.
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    Cited by:

    1. Ladislav Lukáš & Miroslav Plevný, 2016. "Using entropy for quantitative measurement of operational complexity of supplier–customer system: case studies," 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. 24(2), pages 371-387, June.
    2. József Vörös, 2013. "Economic order and production quantity models without constraint on the percentage of defective items," 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. 21(4), pages 867-885, December.
    3. 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.
    4. Panda, S. & Saha, S. & Goyal, S.K., 2013. "Dilemma of rented warehouse and shelf for inventory systems with displayed stock level dependent demand," Economic Modelling, Elsevier, vol. 32(C), pages 452-462.

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