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Optimal ordering policies for deteriorating items with a return period and price-dependent demand under two-phase advance sales

Author

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  • Mei-Chuan Cheng

    (Hsin Sheng Junior College of Medical Care and Management)

  • Tsu-Pang Hsieh

    (Aletheia University)

  • Hsiu-Mei Lee

    (Tamkang University)

  • Liang-Yuh Ouyang

    (Tamkang University)

Abstract

In this article, we establish an inventory model for deteriorating items with a return period and price-dependent demand for the retailer who offers two-phase advance sales to his/her customers. The replenishment cycle is divided into two sales periods: one is the two-phase advance sales period, and the other is the spot sales period. Before customers with reservations receive their orders, they may cancel the order. On the other hand, when the customers receive the order, they can make a request to return products for any reason during the return period. We provide an easy-to-use method to obtain the optimal selling price and the optimal sales period to achieve the retailer’s maximum total profit. Finally, we give numerical examples to illustrate the solution procedure. We perform a sensitivity analysis to investigate the effect of changes of some main parameter values on the optimal solution and provide an economic interpretation.

Suggested Citation

  • Mei-Chuan Cheng & Tsu-Pang Hsieh & Hsiu-Mei Lee & Liang-Yuh Ouyang, 2020. "Optimal ordering policies for deteriorating items with a return period and price-dependent demand under two-phase advance sales," Operational Research, Springer, vol. 20(2), pages 585-604, June.
    • Handle: RePEc:spr:operea:v:20:y:2020:i:2:d:10.1007_s12351-017-0359-9
    DOI: 10.1007/s12351-017-0359-9
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    References listed on IDEAS

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    Cited by:

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    2. Falguni Mahato & Chandan Mahato & Gour Chandra Mahata, 2023. "Sustainable optimal production policies for an imperfect production system with trade credit under different carbon emission regulations," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(9), pages 10073-10099, September.
    3. Mei-Chuan Cheng & Chun-Tao Chang & Tsu-Pang Hsieh, 2023. "An Inventory Model with Advertisement- and Customer-Relationship-Management-Sensitive Demand for a Product’s Life Cycle," Mathematics, MDPI, vol. 11(6), pages 1-16, March.
    4. Mei-Chuan Cheng & Hui-Chiung Lo & Chih-Te Yang, 2023. "Optimizing Pricing, Pre-Sale Incentive, and Inventory Decisions with Advance Sales and Trade Credit under Carbon Tax Policy," Mathematics, MDPI, vol. 11(11), pages 1-18, May.

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