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Optimal replenishment policies for non-instantaneous deteriorating items with price and stock sensitive demand under permissible delay in payment

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  • Soni, Hardik N

Abstract

This study is motivated by the paper of Chang et al. [International Journal of Production Economics 123 (2010) 62–68]. We extend their inventory model from two aspects. (1) The demand rate as multivariate function of price and level of inventory (2) Delay in payment is permissible. Under these assumptions, we first formulated a mathematical model and then some useful theoretical results have been derived to characterize the optimal solutions for non-zero and zero ending inventory system. Numerical examples are presented to illustrate the theoretical results. The sensitivity analysis of a suitable example is performed and some managerial insights are proposed. Our analysis revels that it is more beneficial to keep higher inventory level, hoping to stimulate more demand, even if it results in non-zero ending inventory.

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  • Soni, Hardik N, 2013. "Optimal replenishment policies for non-instantaneous deteriorating items with price and stock sensitive demand under permissible delay in payment," International Journal of Production Economics, Elsevier, vol. 146(1), pages 259-268.
    • Handle: RePEc:eee:proeco:v:146:y:2013:i:1:p:259-268
    DOI: 10.1016/j.ijpe.2013.07.006
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    8. Maihami, Reza & Nakhai Kamalabadi, Isa, 2012. "Joint pricing and inventory control for non-instantaneous deteriorating items with partial backlogging and time and price dependent demand," International Journal of Production Economics, Elsevier, vol. 136(1), pages 116-122.
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    2. Dana Marsetiya Utama & Fakhrina Fahma Abdullah & Ikhlasul Amallynda & Teguh Baroto, 2024. "Integrated production-inventory model for multi-item raw materials with exponential quality degradation: a real case study," OPSEARCH, Springer;Operational Research Society of India, vol. 61(4), pages 1862-1887, December.
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    4. San-José, Luis A. & Sicilia, Joaquín & Cárdenas-Barrón, Leopoldo Eduardo & González-de-la-Rosa, Manuel, 2024. "A sustainable inventory model for deteriorating items with power demand and full backlogging under a carbon emission tax," International Journal of Production Economics, Elsevier, vol. 268(C).
    5. Valentín Pando & Luis A. San-José & Joaquín Sicilia & David Alcaide-López-de-Pablo, 2021. "Profitability Index Maximization in an Inventory Model with a Price- and Stock-Dependent Demand Rate in a Power-Form," Mathematics, MDPI, vol. 9(10), pages 1-29, May.
    6. R. Udayakumar & K. V. Geetha, 2017. "Economic ordering policy for single item inventory model over finite time horizon," International Journal of System Assurance Engineering and Management, Springer;The Society for Reliability, Engineering Quality and Operations Management (SREQOM),India, and Division of Operation and Maintenance, Lulea University of Technology, Sweden, vol. 8(2), pages 734-757, November.
    7. Li, Guiping & He, Xiuli & Zhou, Jing & Wu, Hao, 2019. "Pricing, replenishment and preservation technology investment decisions for non-instantaneous deteriorating items," Omega, Elsevier, vol. 84(C), pages 114-126.
    8. Wu, Jiang & Skouri, Konstantina & Teng, Jinn-Tsair & Ouyang, Liang-Yuh, 2014. "A note on “optimal replenishment policies for non-instantaneous deteriorating items with price and stock sensitive demand under permissible delay in payment”," International Journal of Production Economics, Elsevier, vol. 155(C), pages 324-329.
    9. Chung, Kun-Jen & Eduardo Cárdenas-Barrón, Leopoldo & Ting, Pin-Shou, 2014. "An inventory model with non-instantaneous receipt and exponentially deteriorating items for an integrated three layer supply chain system under two levels of trade credit," International Journal of Production Economics, Elsevier, vol. 155(C), pages 310-317.
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    11. Juanjuan Qin & Xiaojian Bai & Liangjie Xia, 2015. "Sustainable Trade Credit and Replenishment Policies under the Cap-And-Trade and Carbon Tax Regulations," Sustainability, MDPI, vol. 7(12), pages 1-22, December.
    12. Lin, Feng & Jia, Tao & Wu, Feng & Yang, Zhen, 2019. "Impacts of two-stage deterioration on an integrated inventory model under trade credit and variable capacity utilization," European Journal of Operational Research, Elsevier, vol. 272(1), pages 219-234.
    13. Fauza, Gusti & Amer, Yousef & Lee, Sang-Heon & Prasetyo, Hari, 2016. "An integrated single-vendor multi-buyer production-inventory policy for food products incorporating quality degradation," International Journal of Production Economics, Elsevier, vol. 182(C), pages 409-417.
    14. Chung, Kun-Jen & Liao, Jui-Jung & Ting, Pin-Shou & Lin, Shy-Der & Srivastava, H.M., 2015. "The algorithm for the optimal cycle time and pricing decisions for an integrated inventory system with order-size dependent trade credit in supply chain management," Applied Mathematics and Computation, Elsevier, vol. 268(C), pages 322-333.
    15. Beatriz Abdul-Jalbar & Roberto Dorta-Guerra & José M. Gutiérrez & Joaquín Sicilia, 2021. "Production/Inventory Policies for a Two-Echelon System with Credit Period Incentives," Mathematics, MDPI, vol. 9(15), pages 1-25, July.
    16. Ali Akbar Shaikh & Leopoldo Eduardo Cárdenas-Barrón & Amalesh Kumar Manna & Armando Céspedes-Mota & Gerardo Treviño-Garza, 2021. "Two Level Trade Credit Policy Approach in Inventory Model with Expiration Rate and Stock Dependent Demand under Nonzero Inventory and Partial Backlogged Shortages," Sustainability, MDPI, vol. 13(23), pages 1-19, December.
    17. Chandan Mahato & Gour Chandra Mahata, 2021. "Optimal inventory policies for deteriorating items with expiration date and dynamic demand under two-level trade credit," OPSEARCH, Springer;Operational Research Society of India, vol. 58(4), pages 994-1017, December.
    18. Armin Jabbarzadeh & Leyla Aliabadi & Reza Yazdanparast, 2021. "Optimal payment time and replenishment decisions for retailer’s inventory system under trade credit and carbon emission constraints," Operational Research, Springer, vol. 21(1), pages 589-620, March.
    19. Rabbani, Masoud & Pourmohammad Zia, Nadia & Rafiei, Hamed, 2016. "Joint optimal dynamic pricing and replenishment policies for items with simultaneous quality and physical quantity deterioration," Applied Mathematics and Computation, Elsevier, vol. 287, pages 149-160.
    20. Luis A. San-José & Joaquín Sicilia & Manuel González-De-la-Rosa & Jaime Febles-Acosta, 2020. "Best pricing and optimal policy for an inventory system under time-and-price-dependent demand and backordering," Annals of Operations Research, Springer, vol. 286(1), pages 351-369, March.
    21. Sadia Samar Ali & Haripriya Barman & Rajbir Kaur & Hana Tomaskova & Sankar Kumar Roy, 2021. "Multi-Product Multi Echelon Measurements of Perishable Supply Chain: Fuzzy Non-Linear Programming Approach," Mathematics, MDPI, vol. 9(17), pages 1-27, August.
    22. Luis A. San-José & Joaquín Sicilia & Manuel González-de-la-Rosa & Jaime Febles-Acosta, 2021. "Optimal Price and Lot Size for an EOQ Model with Full Backordering under Power Price and Time Dependent Demand," Mathematics, MDPI, vol. 9(16), pages 1-16, August.
    23. Zhang, Jianxiong & Wang, Yu & Lu, Lihao & Tang, Wansheng, 2015. "Optimal dynamic pricing and replenishment cycle for non-instantaneous deterioration items with inventory-level-dependent demand," International Journal of Production Economics, Elsevier, vol. 170(PA), pages 136-145.
    24. Taleizadeh, Ata Allah, 2014. "An EOQ model with partial backordering and advance payments for an evaporating item," International Journal of Production Economics, Elsevier, vol. 155(C), pages 185-193.
    25. Gour Chandra Mahata & Sujit Kumar De, 2016. "An EOQ inventory system of ameliorating items for price dependent demand rate under retailer partial trade credit policy," OPSEARCH, Springer;Operational Research Society of India, vol. 53(4), pages 889-916, December.

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