OPTIMAL PRICING AND REPLENISHMENT POLICY FOR NONINSTANTANEOUS DETERIORATING ITEMS AND TWO LEVELS OF STORAGE

Iris-Pandora Krommyda (), Konstantina Skouri (), Ioannis Konstantaras () and Ioannis Ganas
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Iris-Pandora Krommyda: Department of Business Administration of Food and Agricultural Enterprises, University of Western Greece, G. Seferi 2, 30100 Agrinio, Greece
Konstantina Skouri: Department of Mathematics, University of Ioannina, 45110, Ioannina, Greece
Ioannis Konstantaras: Department of Business Administration, Business Excellence Laboratory, University of Macedonia, 156 Egnatia Street, 54006 Thessaloniki, Greece

Asia-Pacific Journal of Operational Research (APJOR), 2013, vol. 30, issue 04, 1-28

Abstract: In this paper an inventory control system for deteriorating items with price and time-dependent demand is studied. The majority of the existing literature in inventory systems for deteriorating items, deals with items that are subject to deterioration as soon as they enter the warehouse. However, there are items that have a shelf-life and start deteriorating after a time lag (noninstantaneous deteriorating items). Under some special circumstances, i.e., attractive price discount, low storage cost, high demand, etc; the procurement of a large amount of such items at a time is decided. Because of the fixed capacity of the own warehouse (OW), a rented warehouse (RW) is used to store the excess quantity. In the present paper, a two-warehouse inventory model for noninstantaneous deteriorating items is developed. Shortages at OW are also allowed and partially backlogged at a rate, which is any nonincreasing function of the waiting time up to the next replenishment. For this model, we propose a simple solution procedure to determine the optimal pricing and replenishment schedule.

Keywords: Two-warehouse; noninstantaneous deteriorating items; price and time-dependent demand; partial backlogging (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S0217595913500012

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