Optimal Pricing and Ordering Policies for Non Instantaneous Deteriorating Items with Price Dependent Demand and Maximum Lifetime
Owing to damage, spoil or decay, deteriorating items deteriorate continuously within their maximum lifetime. And deterioration not only causes quantity loss but also worsens their quality. Hence, due to different quality, selling price of deteriorating items may be different to stimulate the market demand. The paper considers an inventory model for non-instantaneous deteriorating item with price dependent demand and maximum lifetime. The system aims to maximize the retailer’s profit by determining its optimal price at deteriorated stage and replenishment cycle. And two distinct cases as well as the corresponding theorems are formulated. Finally, several theoretical results and managerial insights are obtained via numerical examples.
KeywordsInventory Maximum lifetime Non-instantaneous deteriorating items Price dependent demand
The work is supported by the National Science Foundation of China (No: 71271168).
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