Optimizing inventory and marketing policy for non-instantaneous deteriorating items with generalized type deterioration and holding cost rates

Nita H Shah, Hardik N Soni and Kamlesh A Patel

Omega, 2013, vol. 41, issue 2, 421-430

Abstract: This paper considers an inventory system with non-instantaneous deteriorating item in which demand rate is a function of advertisement of an item and selling price. This paper aids the retailer in maximizing the total profit by determining optimal inventory and marketing parameters. In contrast to previous inventory models, an arbitrary holding cost rate and arbitrary deterioration rate have been incorporated to provide general framework to the model. First, a mathematical model is formulated and then some useful theoretical results have been framed to characterize the optimal solutions. The necessary and sufficient conditions for the existence and uniqueness of the optimal solutions are also derived. An algorithm is designed to find the optimum solutions of the proposed model. Numerical examples are included to illustrate the algorithmic procedure and the effects of key parameters are studied to analyze the behavior of the model.

Keywords: Inventory; Non-instantaneous deterioration; Variable demand; Variable deterioration and holding cost rates (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (38)

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DOI: 10.1016/j.omega.2012.03.002

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