An inventory model for non-instantaneous deteriorating items with partial backlogging, permissible delay in payments, inflation- and selling price-dependent demand and customer returns
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This paper develops an economic ordering policy model for non-instantaneous deteriorating items with selling price- and inflation-induced demand under the effect of inflation, permissible delay in payments and customer returns. Shortages are allowed and partially backlogged. The customer returns are assumed to increase with both the quantity sold and the product price. The main objective is to determine the optimal selling price, the optimal length of time in which there is no inventory shortage, and the optimal replenishment cycle simultaneously, to minimize the present value of the total profit. An efficient algorithm is presented to find the optimal solution of the developed model. Finally, a numerical example is extracted to solve the presented inventory model using the proposed algorithm.
KeywordsOptimal pricing and inventory Permissible delay in payments Non-instantaneous deteriorating items Customer returns Inflation
The authors greatly appreciate the anonymous referees for their valuable and helpful suggestions regarding earlier version of the paper.
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