AN EOQ MODEL FOR NON-INSTANTANEOUS DETERIORATING ITEMS WITH TWO PHASE DEMAND RATES AND TWO-LEVEL PRICING STRATEGIES UNDER TRADE CREDIT POLICY.
Keywords:
trade credit policy, two-level pricing strategies, two phase demand rate rates, non-instantaneous deteriorating items, economic order quantityAbstract
In some classical inventory models for non-instantaneous deteriorating items, it is tacitly assumed that the selling price before and after deterioration sets in is the same. However, in real practice, when deterioration sets in, the retailer may decide to reduce
the selling price in order to encourage more sales, reduces the cost of holding stock, attracts new customers and reduces lost due to deterioration. In this paper, an EOQ model for non-instantaneous deteriorating items with two phase demand rates and two-level pricing strategies under trade credit policy is considered. It is assumed that the unit selling price before deterioration sets in is greater than that after deterioration sets in. Also, the demand rate before deterioration sets in is assumed to be continuous time-dependent quadratic and that after deterioration sets in is considered as constant and shortages are not allowed. The main purpose of this research work is to determine the optimal cycle length and corresponding economic order quantity such that the total profit of the inventory system is optimise. The necessary and sufficient conditions for the existence and uniqueness of the optimal solutions have been established. Some numerical examples have been given to illustrate the theoretical result of the model. Sensitivity analysis of some model parameters on the decision variables has been carried out and suggestions toward
maximising the total profit were also given.
Downloads
References
Tsao, Y.C. and Sheen, G.J. (2008). Dynamic pricing, promotion and replenishment policies for a deteriorating items under permissible delay in payments. Computers & Operations Research, 35(11), 3562–3580.
Lee, C. C. and Hsu, S. L. (2009). A two-warehouse production model for deteriorating inventory items with time- dependent demands. European Journal of Operational Research, 194(3), 700–710.
Tsao, Y.C. (2010). Two-phase pricing and inventory management for deteriorating and fashion goods under trade credit. Mathematical Methods of Operations Research, 72(1), 107–127.
Chen, L. H. and Kang, F. S. (2010). Integrated inventory models considering the two-level trade credit policy and a price-negotiation scheme. European Journal of Operational Research, 205(1), 47–58.
Wang, Y., Zhang, J. and Tang, W. (2015). Dynamic pricing for non-instantaneous deteriorating items. Journal of Intelligent Manufacturing, 26(4), 629–640.
Tsao, Y.C., Zhang, Q., Fang, H.P. and Lee, P.L. (2017). Two-level pricing and ordering for non-instantaneous deteriorating items under trade credit. Operational Research International Journal, 19(3), 833–852.
Dye, C. Y. (2012). A finite horizon deteriorating inventory model with two-phase pricing and time-varying demand and cost under trade credit financing using particle swarm optimization. Swarm and Evolutionary Computation, 5(1), 37–53.
Dye, C. Y. and Hsieh, T. P. (2013). Joint pricing and ordering policy for an advance booking system with partial order cancellations. Applied Mathematical Modelling, 37(6), 3645–3659.
Sainathan, A. (2013). Pricing and replenishment of competing perishable product variants under dynamic demand substitution. Production Operation Management, 22(5), 1157–1181
Herbon, A. (2015). Optimal two-level piecewise-constant price discrimination for a storable perishable product. International Journal of Production Research, 56(5), 1738–1756.
Tayal, S., Singh, S. R., Sharma, R. and Singh, A. P. (2015). An EPQ model for non-instantaneous deteriorating item with time dependent holding cost and exponential demand rate. International Journal of Operational Research, 23(2), 145–162.
Downloads
Published
Issue
Section
License
Copyright (c) 2024 The Transactions of the Nigerian Association of Mathematical Physics
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
