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Impact of Forthcoming Price Increase for Maximum Fixed Lifetime Product with Preservation Technology Investment and Price-Sensitive Demand

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Recent Trends in Design, Materials and Manufacturing

Part of the book series: Lecture Notes in Mechanical Engineering ((LNME))

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Abstract

Whenever a supplier proclaims a price rise, the effect is amplified at a predetermined point in the future. At that point, each retailer should decide whether to buy more stock or to purchase at a higher price to take benefit of the present lower price. The result of price changes on the retailer's daily replenishment strategy for deteriorating items with expiry dates is discussed in this model. Price-sensitive demand is addressed in this research and is appropriate for products whose demand falls rapidly as the price of the product rises. This article advocates two scenarios: (I) when the special-order time coincides with the retailer’s replenishment time; and (II) when the special-order time occurs during the retailer’s sales period. The crucial objective of this article is to determine the best ordering policies for the retailer in all cases that reduce the profit difference function between the regular order and the special order during the reduction time of the special-order quantity concerning cycle time, selling price, and investment for preservation technology. The scenarios are set up and demonstrated with numerical illustrations. Additionally, to investigate the impacts of key parameters on an optimum solution, a sensitivity analysis is carried out.

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Authors and Affiliations

  1. Department of Applied Sciences, Faculty of Engineering and Technology, Parul University, Vadodara, Gujarat, 391760, India

    Mrudul Y. Jani & Manish R. Betheja

  2. Government Polytechnic Dahod, Dahod, Gujarat, 389151, India

    Urmila Chaudhari

Authors
  1. Mrudul Y. Jani
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  2. Manish R. Betheja
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  3. Urmila Chaudhari
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Editor information

Editors and Affiliations

  1. Department of Mechanical Engineering, Amity School of Engineering and Technology, Amity University, Madhya Pradesh, India

    Manvandra Kumar Singh

  2. Department of Mechanical Engineering, IIT(BHU) Varanasi, Uttar Pradesh, India

    Rakesh Kumar Gautam

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Jani, M.Y., Betheja, M.R., Chaudhari, U. (2022). Impact of Forthcoming Price Increase for Maximum Fixed Lifetime Product with Preservation Technology Investment and Price-Sensitive Demand. In: Singh, M.K., Gautam, R.K. (eds) Recent Trends in Design, Materials and Manufacturing. Lecture Notes in Mechanical Engineering. Springer, Singapore. https://doi.org/10.1007/978-981-16-4083-4_7

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  • DOI: https://doi.org/10.1007/978-981-16-4083-4_7

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  • Publisher Name: Springer, Singapore

  • Print ISBN: 978-981-16-4082-7

  • Online ISBN: 978-981-16-4083-4

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