With recent developments in the technological world, the issue of deterioration has been addressed efficiently through preservation technology by numerous researchers. The fundamental concept of preservation technology involves an investment that is majorly dependent on the initial deterioration rate, irrespective of the selling price of the product. Owing to this, two different products having the same deterioration rate but different selling price requires equal investment, which is irrational. Further, the investment in preservation technology was considered to be per unit time irrespective of the number of units being held, which is again a major drawback of the existing literature. Thus, this paper attempts to bridge the gap by proposing a realistic way of implementing preservation technology, where not only the investment is per unit, but also depends on the selling price of that unit. The model jointly optimizes the selling price, the fraction of per unit profit to be invested in preservation technology, and cycle length to maximize the overall profit. The proposed model proves out to be economically more viable, through superior cost management, when compared with the existing model. The model is further illustrated with comparative numerical examples and graphical representations. Moreover, sensitivity analysis is performed to convey model characteristics.
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DOI : 10.1051/ro/2022015
Keywords: Deterioration, Price-sensitive investment in preservation technology, Price-sensitive demand
@article{RO_2022__56_2_601_0,
author = {Priyamvada and Rini and Jaggi, Chandra K.},
title = {Optimal inventory strategies for deteriorating items with price-sensitive investment in preservation technology},
journal = {RAIRO. Operations Research},
pages = {601--617},
year = {2022},
publisher = {EDP-Sciences},
volume = {56},
number = {2},
doi = {10.1051/ro/2022015},
mrnumber = {4398962},
language = {en},
url = {https://www.numdam.org/articles/10.1051/ro/2022015/}
}
TY - JOUR AU - Priyamvada AU - Rini AU - Jaggi, Chandra K. TI - Optimal inventory strategies for deteriorating items with price-sensitive investment in preservation technology JO - RAIRO. Operations Research PY - 2022 SP - 601 EP - 617 VL - 56 IS - 2 PB - EDP-Sciences UR - https://www.numdam.org/articles/10.1051/ro/2022015/ DO - 10.1051/ro/2022015 LA - en ID - RO_2022__56_2_601_0 ER -
%0 Journal Article %A Priyamvada %A Rini %A Jaggi, Chandra K. %T Optimal inventory strategies for deteriorating items with price-sensitive investment in preservation technology %J RAIRO. Operations Research %D 2022 %P 601-617 %V 56 %N 2 %I EDP-Sciences %U https://www.numdam.org/articles/10.1051/ro/2022015/ %R 10.1051/ro/2022015 %G en %F RO_2022__56_2_601_0
Priyamvada; Rini; Jaggi, Chandra K. Optimal inventory strategies for deteriorating items with price-sensitive investment in preservation technology. RAIRO. Operations Research, Tome 56 (2022) no. 2, pp. 601-617. doi: 10.1051/ro/2022015
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