The product life cycle of a deteriorating product is an important consideration in inventory management. This paper simultaneously investigates the optimum pricing and inventory decisions considering product life cycles under price-dependent demand and advance payment systems with a discount facility. A time-dependent holding cost is also introduced. The objective is to carefully balance the critical decision variables in order to maximize the total profit. Furthermore, the theoretical analysis validates the concavity of the profit function. A numerical example and sensitivity analysis are provided to show the characteristics of the model. The study shows that an advanced payment period, installment numbers, product’s maximum life cycle, purchasing cost and demand function significantly influence the total profit. This inventory model with a known product lifetime and advance payments can provide management insights to inventory manager in his/her strategic planning.
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DOI : 10.1051/ro/2020106
Keywords: Advance payment, deterioration, inventory, product life cycle, price-dependent demand
@article{RO_2021__55_S1_S1069_0,
author = {Mashud, Abu Hashan Md and Roy, Dipa and Daryanto, Yosef and Wee, Hui-Ming},
title = {Joint pricing deteriorating inventory model considering product life cycle and advance payment with a discount facility},
journal = {RAIRO. Operations Research},
pages = {S1069--S1088},
year = {2021},
publisher = {EDP-Sciences},
volume = {55},
doi = {10.1051/ro/2020106},
mrnumber = {4223199},
language = {en},
url = {https://www.numdam.org/articles/10.1051/ro/2020106/}
}
TY - JOUR AU - Mashud, Abu Hashan Md AU - Roy, Dipa AU - Daryanto, Yosef AU - Wee, Hui-Ming TI - Joint pricing deteriorating inventory model considering product life cycle and advance payment with a discount facility JO - RAIRO. Operations Research PY - 2021 SP - S1069 EP - S1088 VL - 55 PB - EDP-Sciences UR - https://www.numdam.org/articles/10.1051/ro/2020106/ DO - 10.1051/ro/2020106 LA - en ID - RO_2021__55_S1_S1069_0 ER -
%0 Journal Article %A Mashud, Abu Hashan Md %A Roy, Dipa %A Daryanto, Yosef %A Wee, Hui-Ming %T Joint pricing deteriorating inventory model considering product life cycle and advance payment with a discount facility %J RAIRO. Operations Research %D 2021 %P S1069-S1088 %V 55 %I EDP-Sciences %U https://www.numdam.org/articles/10.1051/ro/2020106/ %R 10.1051/ro/2020106 %G en %F RO_2021__55_S1_S1069_0
Mashud, Abu Hashan Md; Roy, Dipa; Daryanto, Yosef; Wee, Hui-Ming. Joint pricing deteriorating inventory model considering product life cycle and advance payment with a discount facility. RAIRO. Operations Research, Tome 55 (2021), pp. S1069-S1088. doi: 10.1051/ro/2020106
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