Adaptation of different inventory policies to each phase of the product life cycle

This paper introduces a novel inventory model tailored for retailing systems aligned with the Product Life Cycle (PLC), encompassing the introduction-growth, maturity, and decline stages. Diverging from previous inventory models that integrate sales incentive policies without consideration of PLC characteristics, this study pioneers an integrated framework. The paper introduces an innovative decreasing time-based discount policy tailored for the introduction-growth stage. Following that, a quantity discount policy is devised for the maturity phase, while a delay payment policy and an incremental time-based discount policy are formulated for the decline phase. Recognizing the product's heightened market recognition during the maturity phase, a partial backorder system with variable shortage costs is proposed to address shortages. The findings indicate that extending the duration of the maturity phase, along with elevating the costs associated with each unit of shortage in this phase, results in an augmentation of the retailer's profit.