Pricing and ordering strategy for new product and buyback strategy for used product from retailer's point

Dharmesh K. Katariya and Kunal T. Shukla

International Journal of Operational Research, 2024, vol. 50, issue 2, 148-169

Abstract: Today environmental spectrums are much considered while purchasing a new product because of global awareness about sustainability of environment, hence an interest for use of restored products has increased. The retailer is a decision-maker; retailer sells a new product to the consumers and collects the used sold products for reselling. In this deteriorating inventory model, the demand rate of new products is a nonlinear function and demand rate of used buyback products is linear function of selling price and time-dependent respectively. Shortages are allowed and the unsatisfied demand is partially backlogged. The objective is to maximise total profit per time unit for a retailer concerning to optimise selling price, order quantity for a new product, and quantity of used buyback products simultaneously. Global optimality is verified by Hessian matrix method and graphically. This model is explained through a numerical example, sensitivity analysis, and managerial insights. Ultimately, some concluding remarks with future scopes are discussed.

Keywords: inventory; used buyback product; price dependent demand; deterioration; partial backlogging. (search for similar items in EconPapers)
Date: 2024
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