Joint pricing deteriorating inventory model considering product life cycle and advance payment with a discount facility

Abstract

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.

A Sustainable Economic Recycle Quantity Model for Imperfect Production System with Shortages

“…As the recycling process is shown in the model, a proper waste management (Tsai et al 2021) could be another important discussion that is missing in this study. Some marketing strategies, for instance, discount on imperfect items (Mashud et al 2020a), trade credit financing (Liao et al 2018(Liao et al , 2020Srivastava et al 2018;Mashud et al 2021aMashud et al , 2021d can be implemented in the proposed model to make it more lucrative to the practitioners. Other imperfect process in both the EOQ and EPQ models (Lin and Srivastava 2015;Srivastava et al 2021) can also be consider as an interesting extension.…”

“…Demand is a fundamental key factor in inventory models because it determines the perplexity of optimal results. Sometimes demand becomes uncertain (Mashud et al 2020b) and sometimes it depends on the price of the products (Mashud et al 2021a(Mashud et al , 2021c. Fuzzy demand is also very popular among the practitioners of inventory research (Tayyab et al 2019a).…”

Inventory decisions on the transportation system and carbon emissions under COVID-19 effects: A sensitivity analysis

“… Chowdhury et al, 2021 , Hariga and As’ad, R., Shamayleh, 2017 , Mashud et al, 2021 , Mashud et al, 2020 , Mashud et al, 2020 , Mashud et al, 2021 , Mashud et al, 2021 , , 2020 .…”

Revenue and risk sharing in view of uncertain demand during the pandemics

“…Due to workforce disruptions, semiconductor and parts shortages, global suppliers cannot satisfy all the orders, and the global demand is affected. Some researchers and enterprises have developed strategies and methods to overcome the challenges of supplier-retailer coordination system [15,23,24]. Contract policies of supplier-retailer coordinated and collaborated system have been investigated by many researchers and enterprises in recent years [4,5,7].…”