Pricing Policy in an Inventory Model with Green Level Dependent Demand for a Deteriorating Item

Md. Abdul Hakim, Ibrahim M. Hezam, Adel Fahad Alrasheedi and Jeonghwan Gwak
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Md. Abdul Hakim: Department of Mathematics, Comilla University, Cumilla 3506, Bangladesh
Ibrahim M. Hezam: Department of Statistics & Operations Research, College of Sciences, King Saud University, Riyadh 11451, Saudi Arabia
Adel Fahad Alrasheedi: Department of Statistics & Operations Research, College of Sciences, King Saud University, Riyadh 11451, Saudi Arabia
Jeonghwan Gwak: Department of Software, Korea National University of Transportation, Chungju 27469, Korea

Sustainability, 2022, vol. 14, issue 8, 1-16

Abstract: The goal of this research is to investigate an inventory model for degrading commodities with linear selling prices and nonlinear green level-dependent demand for an item. The pre-payment option with a one-time flat reduction on the product’s selling price is considered here. The governing differential equations are used to mathematically define the model and solve numerically to optimize the model’s average profit. After that, the model is tested using a numerical example, and sensitivity analyses are run to see how changing inventory factors affects the best strategy. The concavity of the objective function is shown graphically with the help of MATLAB software. Finally, some applications of this approach and future scopes are discussed.

Keywords: inventory; price and green level dependent demand; advance payment; partial backlogging; discount (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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