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Joint pricing and inventory decisions for perishable products with age-, stock-, and price-dependent demand rate

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  • Maher A. N. Agi
  • Hardik N. Soni

Abstract

This article presents a deterministic model for jointly optimising pricing and inventory control of a perishable product subject to both physical deterioration and freshness condition degradation. The demand for the product depends on its price, the current inventory level and the freshness condition. Our model allows for any positive amount of end-of-cycle inventory. Conditions for the existence and uniqueness of an optimal solution of the model are developed and an algorithm is suggested to find the optimal values of the price, the cycle length, the order quantity, and the end-of-cycle inventory. Then, numerical examples are given, and sensitivity analysis is performed. Our study contributes to satisfying the need for inventory models that consider simultaneous physical deterioration and freshness degradation of perishable products along with price-, age- and stock-dependent demand.

Suggested Citation

  • Maher A. N. Agi & Hardik N. Soni, 2020. "Joint pricing and inventory decisions for perishable products with age-, stock-, and price-dependent demand rate," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 71(1), pages 85-99, January.
    • Handle: RePEc:taf:tjorxx:v:71:y:2020:i:1:p:85-99
    DOI: 10.1080/01605682.2018.1525473
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    Cited by:

    1. Xuxiang Luo & Zaiming Liu & Jinbiao Wu, 2020. "Dynamic Pricing and Optimal Control for a Stochastic Inventory System with Non-Instantaneous Deteriorating Items and Partial Backlogging," Mathematics, MDPI, vol. 8(6), pages 1-22, June.
    2. R. Sundararajan & M. Palanivel & S. Vaithyasubramanian, 2023. "On the EOQ Models with Advertisement-Price-Dependent Demand and Quantity Discount with Expiration Date Under Shortage," SN Operations Research Forum, Springer, vol. 4(4), pages 1-31, December.
    3. Terzi, Mourad & Ouazene, Yassine & Yalaoui, Alice & Yalaoui, Farouk, 2023. "Lot-sizing and pricing decisions under attraction demand models and multi-channel environment: New efficient formulations," Operations Research Perspectives, Elsevier, vol. 10(C).
    4. Bikash Koli Dey & Hyesung Seok & Kwanghun Chung, 2024. "Optimal Decisions on Greenness, Carbon Emission Reductions, and Flexibility for Imperfect Production with Partial Outsourcing," Mathematics, MDPI, vol. 12(5), pages 1-29, February.
    5. Chandan Mahato & Gour Chandra Mahata, 2023. "Optimal Pricing and Inventory Decisions for Perishable Products with Multivariate Demand Function Under Trade Credit," SN Operations Research Forum, Springer, vol. 4(2), pages 1-26, June.
    6. Dey, Bikash Koli & Sarkar, Mitali & Chaudhuri, Kripasindhu & Sarkar, Biswajit, 2023. "Do you think that the home delivery is good for retailing?," Journal of Retailing and Consumer Services, Elsevier, vol. 72(C).
    7. Beatrice Marchi & Lucio E. Zavanella & Simone Zanoni, 2023. "Supply chain finance for ameliorating and deteriorating products: a systematic literature review," Journal of Business Economics, Springer, vol. 93(3), pages 359-388, April.
    8. 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.
    9. Yiju Wang & Donglei Du & Jingfu Huang, 2021. "Optimal Replenishment Strategy for Inventory Mechanism with Step-Shaped Demand," Journal of Optimization Theory and Applications, Springer, vol. 190(3), pages 841-860, September.

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