Pricing-Inventory Model with Discrete Demand and Delivery Orders

Abstract

This paper aims to develop an inventory model considering discrete demand, coordinated pricing, and multiple delivery policy in a single-buyer single- supplier production-inventory system. The shortage is not allowed and the planning horizon is considered to be infinite. The main objective of the framework is to equip the decision-maker with optimal order, pricing, and shipment quantities to maximize the total profit of the system. The results obtained from the numerical example reveal that the proposed approach with an average selling price equal to about 94% of the classical model, has resulted in an average profit increase of about 16% and an average order increase of about 34% compared to the classical approach. (original abstract)