Inventory Models for Deteriorative items with Constant and Linear Price Dependent Demand - in third order Equation

• Sivashankari, C. K. ^[1] ; Vijayakumar, P. ^[2]
  1. [1] RMK Engineering College (Chennai)
  2. [2] RVS College of Engineering and Technology (Coimbatore)
• Localización: BEIO, Boletín de Estadística e Investigación Operativa, ISSN 1889-3805, Vol. 37, Nº. 2, 2021, págs. 98-120
• Idioma: inglés
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• Resumen

  • The research work on fundamental connection between the price theory and inventory control work was sprung up by many statisticians, economists and businessmen in spite of the high level of interest in inventory control. Most of the inventory control system now in operation assumed the known price structure. In this paper joint pricing and inventory control model for deteriorating items with constant and linear price dependent demand is developed. The research is carried out with the extension work in Whitin (1955) who derived the linear dependent price which is in third order equation. The third order equation was not solved by T.M. Whintin and the deteriorating items was also not considered. But in this research paper, the derived third order equation is solved by using Visual Basic 6.0 and deteriorative items are also considered. There are two decision variables that is optimum quantity and optimum price. Two models are developed: the first model uses constant price dependent demand and the second model uses linear price dependent demands. The objective is to determine the optimal selling price and the optimal order quantity simultaneously such that the total profit is maximized. The mathematical model is derived and illustrative examples are provided and numerically verified and for the given data, the break even analysis is also provided. Sensitivity analysis is performed.

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