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Optimal pricing and ordering policies for an integrated inventory model with stock and price sensitive demand. (English) Zbl 1379.90001

Summary: In this paper we propose an integrated inventory model to maximize joint total profit of supplier and retailer. Display of units play a specific role to boost the demand as it may encourage customers to purchase more, moreover price is also a major factor affecting demand; taking this into consideration the proposed model takes demand rate as stock and price dependent. Mathematical model has been developed under certain assumptions and the objective is to determine optimal number of shipments from supplier to retailer, cycle time and selling price which maximizes the joint total profit of supply chain. Numerical example is presented and sensitivity analysis for some key parameters is carried out to demonstrate the influence on over-all profit, selling price and cycle time. The proposed model is applicable to fast moving consumer goods (FMCG), gallery, super market, bakery products, home textile industry, etc.

MSC:

90B05 Inventory, storage, reservoirs
90C31 Sensitivity, stability, parametric optimization
91B24 Microeconomic theory (price theory and economic markets)
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