Title: Joint production planning, pricing and inventory control for deteriorating items

Authors: Hamed Pouralikhani; Mohammad Mohammadi; Bahman Naderi

Addresses: Department of Industrial Engineering, Faculty of Engineering, Kharazmi University, 15719 – 14911 Tehran, Iran ' Department of Industrial Engineering, Faculty of Engineering, Kharazmi University, 15719 – 14911 Tehran, Iran ' Department of Industrial Engineering, Faculty of Engineering, Kharazmi University, 15719 – 14911 Tehran, Iran

Abstract: In this paper, an inventory model with time and price dependent demand is developed in two echelon supply chain consists of producer and retailer. Deterioration rate considering in this model is assumed to follow Weibull distribution with known parameters. In addition, shortage is allowed in retailer and partially backlogged. The purpose of this research is to maximise the profits for firms which one side retailer finds the selling price and the economic order quantity simultaneously, and another side producer optimises production time and the number of delivery. The optimal decisions are determined by a proposed solution algorithm, and a numerical example is solved to endorse it. Eventually, sensitivity analysis on the optimal solution is carried out, and also some practical examples are presented.

Keywords: inventory control; production planning; pricing; time proportional deteriorating items; time and price dependent demand.

DOI: 10.1504/IJSOM.2017.087286

International Journal of Services and Operations Management, 2017 Vol.28 No.3, pp.279 - 308

Received: 27 Oct 2015
Accepted: 18 Mar 2016
Published online: 12 Oct 2017 *

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