An inventory model under price and stock dependent demand for controllable deterioration rate with shortages and preservation technology investment
Umakanta Mishra (),
Leopoldo Eduardo Cárdenas-Barrón (),
Sunil Tiwari (),
Ali Akbar Shaikh () and
Gerardo Treviño-Garza ()
Additional contact information
Umakanta Mishra: ICFAI University, Tripura
Leopoldo Eduardo Cárdenas-Barrón: Tecnológico de Monterrey
Sunil Tiwari: University of Delhi
Ali Akbar Shaikh: Tecnológico de Monterrey
Gerardo Treviño-Garza: BNSF Railway Company
Annals of Operations Research, 2017, vol. 254, issue 1, No 9, 165-190
Abstract This paper develops an EOQ inventory model that considers the demand rate as a function of stock and selling price. Shortages are permitted and two cases are studied: (i) complete backordering and (ii) partial backordering. The inventory model is for a deteriorating seasonal product. The product’s deterioration rate is controlled by investing in the preservation technology. The main purpose of the inventory model is to determine the optimum selling price, ordering frequency and preservation technology investment that maximizes the total profit. Additionally, the paper proves that the total profit is a concave function of selling price, ordering frequency and preservation technology investment. Therefore, a simple algorithm is proposed to obtain the optimal values for the decision variables. Several numerical examples are solved and studied along with a sensitivity analysis.
Keywords: Controllable deterioration rate; Price and stock dependent demand; Preservation technology investment; 90B05 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
http://link.springer.com/10.1007/s10479-017-2419-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:254:y:2017:i:1:d:10.1007_s10479-017-2419-1
Ordering information: This journal article can be ordered from
Access Statistics for this article
Annals of Operations Research is currently edited by Endre Boros
More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla ().