Pricing and inventory control policy for non-instantaneous deteriorating items with time- and price-dependent demand and partial backlogging

Abstract

Determining the optimal inventory control and selling price for deteriorating items is of great significance. In this paper, a joint pricing and inventory control model for deteriorating items with price- and time-dependent demand rate and time-dependent deteriorating rate with partial backlogging is considered. The objective is to determine the optimal price, the replenishment time, and economic order quantity such that the total profit per unit time is maximized. After modeling the problem, an algorithm is proposed to solve the resulted problem. We also prove that the problem statement is concave function and the optimal solution is indeed global.

Keywords

• Pricing
• Inventory control
• Partial backlogging
• Perishable items