An economic production quantity model for an imperfect production system with selling price, advertisement frequency and green-level dependent demand

Mostafijur Rahaman, Shariful Alam, Rakibul Haque, Ali Akbar Shaikh, Pradeep Kumar Behera and Sankar Prasad Mondal ()
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Mostafijur Rahaman: Indian Institute of Engineering Science and Technology, Shibpur
Shariful Alam: Indian Institute of Engineering Science and Technology, Shibpur
Rakibul Haque: Maulana Abul Kalam Azad University of Technology, West Bengal
Ali Akbar Shaikh: University of Burdwan
Pradeep Kumar Behera: Navarchana University
Sankar Prasad Mondal: Maulana Abul Kalam Azad University of Technology, West Bengal

Electronic Commerce Research, 2025, vol. 25, issue 5, No 12, 3748 pages

Abstract: Abstract The consumer’s demand for certain products must be grown through frequent promotion. Also, maintaining the green level of the products can catch customers’ attention. The demand can be boosted by lowering the selling price per unit quantity. These essential issues should be considered while modelling the demand function for a production-retail scenario. The production of commodities cannot be error-free. A small part of the production may be imperfect, and the rate of the imperfect output must be increased as time forwards. The production cost increases as the advertisement frequency, maintenance of green level advances, and time forwards. The inventory carrying cost per unit product also hikes with time. This paper presents a comprehensive inventory optimization model, including the mentioned issues in its hypotheses. The result shows that the average profit is significantly sensitive to the selling price and production cost per unit. The resultant managerial insights after solving the proposed model are as follows. First, the average profit increases with the selling price hike and frequent advertisement. Second, the green level cannot increase average profit, though it causes surplus demand, because maintaining green levels of items incurs additional costs. Third, accumulating defective items during production diminishes average profit as the sellable products are lowered.

Keywords: Imperfect production; Time dependent defective rate; Green product; Variable demand; Variable production cost (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10660-024-09822-9

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