Joint pricing and ordering policy for a deteriorating inventory with partial backlogging |
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Authors: | Chung-Yuan Dye |
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Institution: | Department of Business Administration, Shu-Te University, Yen Chau, Kaohsiung, Taiwan 824, Republic of China |
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Abstract: | In this paper, a deterministic inventory model for deteriorating items with time-dependent backlogging rate is developed. The demand and deterioration rate are known, continuous, and differentiable function of price and time, respectively. Under these general assumptions, we first prove that the optimal replenishment schedule not only exists but is unique, for any given selling price. Next, we show that the total profit is a concave function of price when the replenishment schedule is given. We then provide a simple algorithm to find the optimal selling price and replenishment schedule for the proposed model. Finally, we use a numerical example to illustrate the algorithm. |
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Keywords: | EOQ Pricing Deterioration Partial backlogging |
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