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Optimal batch shipment policy for an imperfect production system under price-, advertisement- and green-sensitive demand

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  • Bibhas C. Giri
  • Anamika Dash

Abstract

In this paper, we consider an imperfect production-inventory system which consists of a single manufacturer and a single retailer. The manufacturer delivers the order quantity to the retailer in some unequal-sized batches. To separate the defective items, the retailer performs an error-free screening process after receiving each delivery from the manufacturer. Shortage in retailer's inventory is allowed and completely backlogged. The customer demand is influenced by the retail price, advertisement frequency and greening level of the product. The centralized model and the decentralized model based on a Stackelberg gaming approach are developed to determine optimal pricing, advertising and inventory decisions. A cost-sharing contract between the manufacturer and the retailer is implemented, which enhances the environmental performance, advertisement frequency and profitability of the supply chain significantly. The proposed model is illustrated with a numerical example. Sensitivity analysis for some key parameters is carried out and several managerial insights are also highlighted.

Suggested Citation

  • Bibhas C. Giri & Anamika Dash, 2022. "Optimal batch shipment policy for an imperfect production system under price-, advertisement- and green-sensitive demand," Journal of Management Analytics, Taylor & Francis Journals, vol. 9(1), pages 86-119, January.
    • Handle: RePEc:taf:tjmaxx:v:9:y:2022:i:1:p:86-119
    DOI: 10.1080/23270012.2021.1931495
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    Cited by:

    1. Rini & Priyamvada, 2023. "COVID-19 challenge: optimizing investment in service and promotional effort with pricing strategy for sustainability in new normal," OPSEARCH, Springer;Operational Research Society of India, vol. 60(3), pages 1218-1229, September.
    2. Erfan Nobil & Leopoldo Eduardo Cárdenas-Barrón & Imelda de Jesús Loera-Hernández & Neale R. Smith & Gerardo Treviño-Garza & Armando Céspedes-Mota & Amir Hossein Nobil, 2023. "Sustainability Economic Production Quantity with Warm-Up Function for a Defective Production System," Sustainability, MDPI, vol. 15(2), pages 1-19, January.
    3. Rimi Karmakar & Sanat K. Mazumder & Md Billal Hossain & Csaba Balint Illes & Arindam Garai, 2023. "Sustainable Green Economy for a Supply Chain with Remanufacturing by Both the Supplier and Manufacturer in a Varying Market," Logistics, MDPI, vol. 7(3), pages 1-48, July.
    4. Ajoy Hatibaruah & Sumit Saha, 2023. "An inventory model for two-parameter Weibull distributed ameliorating and deteriorating items with stock and advertisement frequency dependent demand under trade credit and preservation technology," OPSEARCH, Springer;Operational Research Society of India, vol. 60(2), pages 951-1002, June.
    5. Mei-Chuan Cheng & Chun-Tao Chang & Tsu-Pang Hsieh, 2023. "An Inventory Model with Advertisement- and Customer-Relationship-Management-Sensitive Demand for a Product’s Life Cycle," Mathematics, MDPI, vol. 11(6), pages 1-16, March.

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